Item 1. DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
AmeriStar Network, Inc. (the "Company"), a Delaware Corporation, was incorporated on September 23, 1996, with a plan of operations to engage in the business of developing a nationwide network of mortgage brokers who would utilize an Internet web site portal and Company owned software to originate, transmit and fund mortgage loans.
AmeriStar is still a development stage corporation, and has been in the development stage since its inception in 1996. Its current operations are limited to the holding of its three subsidiaries, which each operate independently. Ameristar's activities in the past three years have been limited to obtaining equity financing for the implementation of its business plan, the acquisition of CVS Technologies and AmeriStar Mortgage in 1999, the failed acquisition attempts to acquire Mortgage Internet Technologies, Inc. (MIT) and Government Micro Resources (GMR)in 1999, the obtaining of the below described license of software technology from MIT and the return of the technology described below, and the acquisition of InTechnologies, Inc. stock. Ameristar developed its business plan in 1996. In 1997, it conducted a private placement of its stock, which it closed upon the filing of a form 211 under Rule 15c-211 to obtain a quotation on the NASD OTC Bulletin Board. It was dropped from quotation on the NASD OTC Bulletin Board in August, 1999, and applied for and was granted a quotation on the National Quotation Bureau's "pink sheets." There have been no reorganizations in the past three years. There have been changes in the Board of Directors pursuant to duly held elections by shareholders, and changes in officers pursuant to duly held elections by the Board of Directors. The president and C.E.O. has been and continues to be since inception, O.Russell Crandall, the founder of the company and creator of its business plan.
The Company has two recently acquired subsidiaries; AmeriStar Mortgage, Inc. is a Delaware corporation engaged in the business of origination of non-bank mortgage loans, principally in the commercial arena, including SBA guaranteed loans; CVS Technologies, Inc. ("CVS")was engaged in the business of development of a Server 98 compliant 4 digit real time clock (RTC), designed exclusively for servers, which business was discontinued because of due to the fact that the Year 2000 crisis was a non-event and management decided that marketing of the product would prove to be infeasible.
Ameristar has since determined that it is not feasible to develop and market the RTC, and managment has decided not to operate CVS as a subsidiary at this time.
The Company was introduced to AmeriStar Mortgage by a consultant familiar with both companies. The steps leading to the acquisition of CVS were that CVS had licensed the exclusive use of its technology to the Company to represent the sale of the product to the mortgage lending industry. The reasons for the acquisition of AmeriStar Mortgage were simply that the company felt that AmeriStar Mortgage was a compatible business. The reason for the acquisition of CVS Technology was that the Company felt that, even though CVS was not in the mortgage lending business, its business was computer related and the Company believed that the CVS Intelligent Y2K card was a viable product. The Company calculated the exchange as a result of negotiations with each acquisition target at a rate of 90% of the market value of the Company's stock at the time of the acquisition. A fairness opinion was not obtained for either transaction, and the negotiations were held on an arms length basis. The assets acquired by the Company from AmeriStar Mortgage were its goodwill.
CVS Technologies and AmeriStar Mortgage, Inc. are wholly owned subsidiaries of the company. They each operate independently and each have their own management, but to the extent they generate sufficient income to pay all of their expenses and generate a profit, that profit will flow to the company, which is ultimately responsible for the administration of the finances of AmeriStar Network, Inc. and all of its subsidiaries. CVS and AmeriStar Mortgage operate independently from the company because they each have a different business from the business of the company and because the terms of the acquisition agreement provide for them to remain independent. This means that the day to day operations of each subsidiary is governed by each subsidiary's own management. The company is engaged in the business of each of its subsidiaries through each subsidiary. Technically, it functions as a holding company, but is not a mere holder of securities of the two subsidiaries; it is actively involved in the setting of policies, goals, monitoring of progress and financial accounting of each of its subsidiaries. CVS has not and will not commence operations and Ameristar's management has decided not to produce and market the RTC card.
The Company has a 48% interest in InTechnologies, Inc., a publicly held company with planned operations to engage in the in the business of providing information technology services and products by acquistion of companies who engage in such business.
AmeriStar's business is not dependent upon one or a few major customers. Government approval is not necessary for AmeriStar's, or AmeriStar Mortgage's business, and government regulations have no or only a negligible effect on their respective businesses.
Neither the Company nor any of its subsidiaries have booked any significant research and development costs and therefore do not expect to pass any of those costs to customers. AmeriStar Mortgage has no product development and AmeriStar Network and CVS' research and development costs were borne by the principals of the respective companies who were compensated for these costs indirectly by an equity position in the Company.
The Company's mailing address is 321 North Mall Drive, Bldg. K, St. George, Utah 84790. The telephone number of its principal executive office is (435) 656-3677 and (800) 810-7687.
IN GENERAL - THE COMPANY
The Company had, until January, 2000, an exclusive license with Mortgage Internet Technologies, Inc. (MIT), for all wholesale mortgage lending business done through MIT's Virtual Lender System and Virtual Lender Internet Web site. In January, 2000, the Board of Directors approved an agreement to return the license rights to MIT in exchange for 20% of MIT's outstanding stock. This system, developed by MIT, allows a mortgage broker to build a website and connect with lenders for available programs, and interest rates and, when the and will allow the broker to lock in interest rates. The Company equips mortgage brokers who subscribe to with a encrypted password protected Internet site, which features underwriters and lenders, and the ability to pre-qualify potential home buyers, which is essential to the "point of sale" origination of mortgage loans. This Internet system provides mortgage loan professionals and the real estate sales associate with the tools and training necessary to start the loan application using the propriety Internet system.
The agreement of November 21, 1999, approved by the Board in January, 2000, sold Ameristar's exclusive license back to MIT for common stock of MIT comprising 20% of its outstanding shares, and an option to purchase an additional 50% of MIT's common shares; 3,740,094 shares at $1.56 per share, which option expires on November 21, 2000. There can be no assurance that AmeriStar will be able to exercise this option, which is assignable.
On April 14, 1998, the Company and Mortgage Internet Technologies, Inc. entered into a non-exclusive letter of intent, whereby the Company intended to acquire 100% of the issued and outstanding shares of Mortgage Internet Technologies, Inc.,(MIT) in exchange for $750,000 in cash and 600,000 shares of company common stock. The completion of the transaction was announced in May 1999 by the Board of Directors of both corporations, but was subsequently canceled by MIT in accordance with the terms of the acquisition agreement.
COMMERCIAL LENDING-AMERISTAR MORTGAGE, INC.
On May 25, 1999, the Company completed its acquisition of 100% of the issued and outstanding stock of AmeriStar Mortgage, Inc., a Delaware Corporation, with whom it signed a letter of intent on March 17, 1999, in an acquisition agreement on April 25, 1999, in exchange for 250,000 shares of company common stock.
Norwood Enterprises, an unrelated company whose management is also unrelated to the company and management of the company, was the party who brought AmeriStar Mortgage, Inc. and the company together for the acquisition agreement, as can be seen from paragraph 3.6 of the acquisition agreement. 150,000 shares of company common stock were issued; 75,000 to Norwood, and 75,000 to its partner, RE Investments, Inc., at Norwood's direction, in compliance with the Company's acquisition agreement of the outstanding stock of CVS Technologies, Inc., pursuant to the exemption contained within Section 4(2) of the Securities Act of 1933, to sophisticated investors with full access to all corporate information, which was set forth the Company's 15c-211 Information statement and updated financial statements of the company. No underwriter was used in the transaction.
AmeriStar Mortgage, Inc. was incorporated in March, 1999 as a development stage company. However, its management operated a mortgage brokerage business under the name of "Access Business Capital." Access Business Capital was a business developed by David Tew in 1997, which conducted commercial mortgage banking and asset finance. During negotiations for the acquisition of AmeriStar Mortgage, Inc., the Company decided to only acquire the commercial mortgage banking aspect of the business. Thus, instead of acquiring Access Business Capital, Mr. Tew incorporated the commercial mortgage business as AmeriStar Mortgage, Inc., and that business was acquired by the Company. However, Access Business Capital does not operate at this time.
AmeriStar Mortgage, Inc. is a nonbank mortgage loan originator with emphasis in the commercial financing area, both SBA guaranteed and conventional. AmeriStar Mortgage, Inc. officers receive a commission of 60% of all earned premiums on loans closed by AmeriStar Mortgage, Inc. They do not receive any fees from the transaction fees generated by the parent Company, AmeriStar Network, Inc. AmeriStar Mortgage, Inc. will operate as a wholly owned subsidiary, independently of the Company. This means that the day to day operations of each subsidiary is governed by each subsidiary's own management. The company is engaged in the business of each of its subsidiaries through each subsidiary. Technically, it functions as a holding company, but is not a mere holder of securities of the two subsidiaries; it is actively involved in the setting of policies, goals, monitoring of progress and financial accounting of each of its subsidiaries. AmeriStar Mortgage, Inc. was incorporated in March, 1999, under the laws of the state of Delaware, and was capitalized with 1500 shares on March 31, 1999. The exchange of shares was made pursuant to an exemption contained within Section 4(2) of the Securities Act of 1933, as amended. No underwriter was used in the transaction. The Company has made a commitment AmeriStar Mortgage, Inc., (AMI), that AMI will operate autonomously of the Company and will be spun off some time in the future, subject to the ability of the Company to do so for the mutual benefit of AMI and the Company.
CVS TECHNOLOGIES, INC.
Norwood Enterprises, Inc., an unrelated company whose managment is also unrelated to the company and to managment of the company, was the party who brought AmeriStar Network, Inc. and CVS together for the acquisition agreement.
CVS was acquired by the Company based on the Company's research revealing studies that the Year 2000 problem was supposed to linger for approximately 30 months, and that most software Y2K fixes did not change the fact that most existing computer server systems operate on a two digit time clock instead of a four digit time clock, and that these software fixes were not designed for the complicated programs run be most servers. However, the Year 2000 problem has proven to be a non-event, and Ameristar has now decided not to complete development and marketing of the RTC and to discontinue all planned operations of CVS.
CVS' product is not a downloadable software fix. It is a Y2K RTC card which gives a server's computer a four digit RTC without replacing the motherboard. The problem it is designed to solve is that of computers using a two digit RTC. The hardware layer, when accessed, reports back to the program and/or the operating system a faulty two digit date (1980, 1900, 1901, etc.) . In a server environment, because of speed and performance, Microsoft NT, Novell and OS2 running on an AT or ATX architecture directly access the hardware layer, such as network cards, video, hard drive controllers, and RTC's. Because of this, software, BIOS or CMOS fixes are useless to correct the two digit problems. CVS' RTC card can be installed by the consumer, as opposed to many of the competition's products, such as other competitors such as those manufactured by Intelliquest, M2Y2K, OutSource, DiNic, and AllStar Cvsace, which require professional installation by a certified computer technician with extensive knowledge of addressing schemes, who must configure the four digit card with a unique address to avoid conflicts and server crashes.
The new intelligent RTC server card form CVS uses proprietary technology (currently under patent application) that automatically assigns the correct address without conflicting with other server components (such as video card, SCSI controllers, network cards, etc.) If you know how to unscrew a computer case and insert a CVS Intelligent RTC card then you can fix your server's two digit RTC with a four digit one without the need for a certified installer. The problem with faulty RTC's does not go away on January 2, 2000. As long as the sever has a two digit RTC and needs to computer 4 digit dates in the next century it will need an intelligent RTC card.
Servers relying on operating systems such as Microsoft NT, which originally claimed that its Microsoft NT version 4.0 does not allow programs to directly access the RTC for time and date information will encounter Year 2000 problems well after January 1, 2000 unless the RTC on the motherboard is replaced with a four digit RTC, or a card such as the CVS Y2K Intelligent RTC is plugged in, which bypasses the faulty two digit RTC existing on most computers.
(2) Source of Data: Securities and Exchange Commission, July, 1999 "Third Report on the Readiness of the United States Securities Industry and Public Companies To Meet the Information Processing Challenges of the Year 2000".
1999 Star Tribune, "Y2K Problems will linger for 30 months."
InfoWorld, January 7, 1999
Government Computing News, January 11, 1999
Web site sources for information on Real Time Clock:
Government Computing News:
http://www.ntgov.com/gcn/gcn/1998/november23/48.htm http://www.ntgov.com/gcn/gcn/1998/november23/48.htm http://www.ntgov.com/gcn/gcn/1998/november23/48.htm http://www.ntgov.com/gcn/gcn/1998/november23/48.htm http://www.ntgov.com/gcn/gcn/1998/november23/48.htm http://www.ntgov.com/gcn/gcn/1998/november23/48.htm
PC World: http://www.pcworld.com/pcwtoday/article/0,1510,8424,00.html
InfoWorld:
http://www.infoworld.com/cgi-bin/displayArchivepl?/98/34/t03-34.1htm http://www.infoworld.com/cgi-bin/displayArchivepl?/98/41/t08-41.8.htm http://www.infoworld.com/cgi-bin/displayStory.pl?98095.ehrtc.htm http://www.infoworld.com/cgi-bin/displayStory.pl?98124.ecy2kchip.htm
PATENTS
Neither Ameristar, AMI, CVS, nor InTechnologies, Inc. hold any patents. AmeriStar owns the domain name, www.ameristarnetwork.com.
RAW MATERIALS AND PRINCIPAL SUPPLIERS AND VENDORS
There are no raw materials used in AmeriStar's, AMI's or InTechnologies' businesses.
COMPETITION
There are numerous companies with greater financial resources than the Company who operate mortgage brokerage businesses, which is the only active business the Company is now involved in through the ownership of AMI.
GOVERNMENT REGULATION
Government approval is not necessary for AmeriStar's, AmeriStar Mortgage, Inc.'s or CVS' business, and government regulations have no effect or a negligible effect on their respective businesses. AmeriStar Mortgage, Inc. needs only to comply with local and national rules with regard to real estate loans, which its principals are familiar with.
EMPLOYEES
The Company presently employs four employees, the President and founder of the Company, Russell Crandall, who devotes his full time efforts to the Company; one Secretary, Tracy Gnagy, and one Vice President, James Herbert, who devote their part time efforts to the Company. AmeriStar Mortgage, Inc. employs one employee, David Tew, the President, who devotes his full time efforts to AMI.
Item 2.
Item 2. DESCRIPTION OF PROPERTY.
The Company rents professional offices from Mortgage Internet Technologies, Inc. on a month-to-month basis, pursuant to an oral agreement. The Company has the proprietary rights to its web site, www.ameristarnetwork.com.CVS owns the rights to its proprietary Intelligent RTC card. CVS' property is limited to its intellectual property rights for its Intelligent RTC card. It has no current operations and no offices. AmeriStar Mortgage, Inc. has no property. It operates out of offices at 6198 Goldfinch Dr., Rayetteville, NC, which is owned by President, David Tew and his brother, Kenneth D. Tew. AmeriStar Mortgage occupies half of the building rent free pursuant to an arrangment between itself and David Tew.
Item 3.
Item 3. LEGAL PROCEEDINGS
On or about August 24, 2000, Michael Avery and Leslie Catsman Avery sued Ameristar and O. Russell Crandall in Utah state court, Case No. 000501353, alleging that Ameristar issued an administrative stop order on their stock on April 23, 2000, which caused them damages by prohibiting them from selling the stock at prices favorable to them. The Company contended that the Averys were not entitled to the stock due to misrepresentation of the status of the CVS product. The lawsuit was dismissed pursuant to a settlement between Ameristar and Averys which allow Ameristar to purchase 1,500,000 of the Averys' 1,833,334 common shares for $.10 per share on or before January 3, 2001.
There are no other pending legal proceedings to which the Company, or its subsidiaries, AmeriStar Mortgage, Inc. and CVS Technologies, Inc. are a party or to which the property interests of the Company or its subsidiaries are subject.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
There were no matters submitted to a vote of security holders through the solicitation of proxies or otherwise during the fourth quarter of the fiscal year covered by this report.
PART II.
Item 5.
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock was listed on the OTC Bulletin Board under the symbol "AMWK" since December, 1998. During the month of July, the NASD has added an "E" to the symbol, making it "AMWKE", indicating that it had been placed on the eligibility list of the NASD Bulletin Board for dropping of a quotation on the Bulletin Board effective August 2, 1999, and was, in fact, dropped from quotation on the Bulletin Board on that date and now its securities are reported by the National Quotation Bureau's "pink sheets, under the symbol "AMWK." There can be no assurance that the Company's securities will again be quoted on the NASD OTC Bulletin Board. The current market price of the Company's common stock is $.20 per share. From inception of trading through December 31, 1998, the high and low last sale prices were $2.25 per share and $.875 per share, respectively. The highest sales price was reported to be $5.25, and the lowest $.18, from inception to the current period. The Company considers its Common stock to be thinly traded and that any reported bid or sale prices may not be a true market-based valuation of the Common Stock. As of December 31, 1998, there were 84 record holders of the Company's Common Stock. As of September 30, 1999, there were 70 shareholders of record of the Company's common stock. The Company has not paid any cash dividends since its inception and does not contemplate paying dividends in the foreseeable future. It is anticipated that earnings, if any, will be retained for the operation of the Company's business.
There are currently 6,458,335 shares of common stock which may be sold pursuant to Rule 144, promulgated by the Securities and Exchange Commission. The company has not agreed to register any restricted securities for selling security holders.
The following table sets forth the range of high and low bid information for each full quarterly period of the last fiscal year:
Period Reported Average High Bid Average Low Bid
Quarter ended December 31, 1998 2.00 1.00 Quarter ended March 31, 1999 2.50 1.20 Quarter ended June 30, 1999 4.00 1.40 Quarter ended September 30, 1999(1) .20 Quarter ended December 31, 1999(1) .20 Quarter ended March 31, 2000(1) .20 Quarter ended June 30, 2000 (1) .20 - ---------------- (1) The average high and low bid information for the company's quotation on the pink sheets is not available. The data shown in the average high bid column is the company's average last trade price.
PENNY STOCK STATUS
The Company's common stock is a "penny stock," as the term is defined by Rule 3a51-1 of the Securities Exchange Act of 1934. This makes it subject to reporting, disclosure and other rules imposed on broker-dealers by the Securities and Exchange Commission requiring brokers and dealers to do the following in connection with transactions in penny stocks:
1. Prior to the transaction, to approve the person's account for transactions in penny stocks by obtaining information from the person regarding his or her financial situation, investment experience and objectives, to reasonably determine based on that information that transactions in penny stocks are suitable for the person, and that the person has sufficient knowledge and experience in financial matters that the person or his or her independent advisor reasonably may be expected to be capable of evaluating the risks of transactions in penny stocks. In addition, the broker or dealer must deliver to the person a written statement setting forth the basis for the determination and advising in highlighted format that it is unlawful for the broker or dealer to effect a transaction in a penny stock unless the broker or dealer has received, prior to the transaction, a written agreement from the person. Further, the broker or dealer must receive a manually signed and dated written agreement from the person in order to effectuate any transactions is a penny stock.
2. Prior to the transaction, the broker or dealer must disclose to the customer the inside bid quotation for the penny stock and, if there is no inside bid quotation or inside offer quotation, he or she must disclose the offer price for the security transacted for a customer on a principal basis unless exempt from doing so under the rules.
3. Prior to the transaction, he broker or dealer must disclose the aggregate amount of compensation received or to be received by the broker or dealer in connection with the transaction, and the aggregate amount of cash compensation received or to be received by any associated person of the broker dealer, other than a person whose function in solely clerical or ministerial.
4. The broker or dealer who has effected sales of penny stock to a customer, unless exempted by the rules, is required to send to the customer a written statement containing the identity and number of shares or units of each such security and the estimated market value of the security. The imposition of these reporting and disclosure requirements on a broker or dealer make it unlawful for the broker or dealer to effect transactions in penny stocks on behalf of customers. Brokers or dealers may be discouraged from dealing in penny stocks, due to the additional time, responsibility involved, and, as a result, this may have a deleterious effect on the market for the company's stock.
(1) The above quotations reflect inter-dealer prices, without retail mark up, mark down or commission and may not represent actual transactions.
(2) Source of information: Stockmaster Stock Quotation Service (Stockmaster.com) and Freerealtime.com.
Item 6.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
PLAN OF OPERATIONS
The Company is engaged in the business of holding 20% of the common stock and an option to purchase a controlling block of MIT stock, the holding of 48% of InTechnologies, Inc., and, through AmeriStar Mortgage, Inc., the mortgage brokerage business. The Company has financed its operations to date through the sale of its securities. See Item 10 - "Recent Sales of Unregistered Securities." The principal accountant's report on the financial statements for the past two years contains a statement to the effect that the company has an accumulated deficit at December 31, 1999, and that these factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's plan of operations over the next 12 months includes the continuation of the business of AmeriStar Mortgage, and the completion of its Form 10Sb without further comments in order to position itself to obtain financing to acquire MIT.
During the next twelve months, the Company plans to satisfy its cash requirements by additional equity financing. There can be no assurance that the company will be successful in raising additional equity financing unless its securities are again quoted on the NASD OTC Bulletin Board, and there can be no assurance that the company will be able to regain a quote of its securities on the Bulletin Board. If the company is not able to raise equity capital, it will not be able to satisfy its cash requirements for the next twelve months, and will only be able to satisfy its cash requirements for the next 60 days. The company will need a minimum of $180,000 to satisfy its cash requirements for the next 12 months. The company will not be able to operate if it does not obtain equity financing. The Company has no current material commitments. The contract payable of $195,000 has been satisfied as of August, 1999. The Company intends to undertake a subsequent private placement of its common stock in order to raise future development and operating capital. The Company depends upon capital to be derived from future financing activities such as subsequent offerings of its stock. Due to the recent drop in market value of the Company's common stock, which the Company attributes to being placed on the NASD's eligibility list for dropping its quotation on the NASD OTC Bulletin Board, and, in fact, being dropped from quotation on the NASD OTC Bulletin Board, there can be no assurance that the Company will be successful in raising the capital it requires unless and until the Company's position with regard to the quotation of its securities has been resolved. The company does not anticipate any further research and development of its product, nor does it expect to incur any research and development costs. The company does not expect the purchase or sale of plant or any significant equipment, and it does not anticipate any change in the number of its employees. The Company has no current material commitments. The contract payable of $195,000 to MIT has been satisfied as of August, 1999. The Company has generated revenue of $63,643 to date. During the next twelve months, CVS Technologies, Inc. will have no cash requirements to satisfy, as its business has been discontinued. There can be no assurance that the company will be successful in raising additional equity financing unless its securities are again quoted on the NASD OTC Bulletin Board, and there can be no assurance that the company will be able to regain a quote of its securities on the Bulletin Board. If the company is not able to raise equity capital, it will not be able to satisfy its cash requirements for the next twelve months, and will only be able to satisfy its cash requirements for the next 60 days.
During the next twelve months, AmeriStar Mortgage, Inc.("AMI") plans to satisfy its cash requirements by operating revenues. AMI does not anticipate any further research and development of its product, nor does it expect to incur any research and development costs. AMI does not expect the purchase or sale of plant or any significant equipment. AMI does not anticipate any change in the number of its employees. AMI has no material commitments. AmeriStar Mortgage, Inc. officers receive a commission of 60% of all earned premiums on loans closed by AmeriStar Mortgage, Inc. They do not receive any fees from the transaction fees generated by the parent Company, AmeriStar Network, Inc.
The Company is still considered to be a development stage company, with no significant revenue, and is dependent upon the raising of capital through placement of its common stock. There can be no assurance that the Company will be successful in raising the capital it requires through the sale of its common stock.
There are no contemplated product research and development costs the Company will perform for the next twelve months. There is no expected purchase or sale of any plant or significant equipment, and there is no expected significant changes in the number of employees contemplated.
The Company completed its acquisition of 100% of the issued and outstanding stock of AmeriStar Mortgage, Inc.,(AMI) a Delaware Corporation, with whom it signed a definitive agreement on April 13, 1999, in exchange for 250,000 shares of company common stock. AmeriStar Mortgage, Inc. took over the commercial lending operations of Access Business Capital, which was a nonbank mortgage loan originator with emphasis in the commercial financing area, both SBA guaranteed and conventional. It closed two commercial loans this year, representing approximately $2.4 million in loaned funds, and currently has 11 loans in review, which represent approximately $25 million in loaned funds. AMI will operate as a wholly owned Company subsidiary. The Company, on April 26, 1999, completed its acquisition of 100% of the issued and outstanding shares of CVS Technologies, Inc., with whom it signed an agreement on April 12, 1999, for 5,500,000 shares of company common stock. This acquisition provides the Company with the rights to CVS's "Y2K fix" technology , formerly licensed to the Company for use in the mortgage industry for mortgage industry servers. CVS has developed a Server 98 compliant 4 digit real time clock, designed exclusively for servers. Compaq, Dell, IBM and all clone AT servers currently use non-Y2K compliant 2 digit RTC clocks. On May 13, 1999, the Company announced the completion of its acquisition of 100% of the issued and outstanding shares of Mortgage Internet Technologies, Inc., (MIT) in exchange for $460,000 in cash and 600,000 shares of company common stock. However, the company's announcement was premature, as the acquisition was not to be consummated until MIT's shareholders approve the acquisition, which was not to take place until the company has satisfied all of its cash payment requirements called for under the letter of intent of April 14, 1998. The completion of the transaction was announced in May, 1999 by the Board of Directors of both corporations, but was subject to the company completing the cash delivery requirements of the agreement and approval by Mortgage Internet Technologies' shareholders. The Company was unable to meet the cash requirements of the Letter of Intent and , as a result, the agreement was canceled in its entirety by MIT. David R. Werner, Director of the Company, resigned on June 29, 1999.
The Company entered into negotiations to acquire all of the assets and 49% of the issued and outstanding common stock of Government Micro Resources, Inc. (GMR). GMR is engaged in the business of providing information technologies to the public and private sector, and a manufacturer of specialized main frame computers. However, GMR and the Company mutually withdrew from negotiations in June, 1999, due to the Company's inability to raise the capital required.
David Werner resigned in June, 1999 because the Company was unable to complete the acquisition of MIT. The reason for the Company stating that he resigned was the Company's duty to disclose his resignation to the public and its shareholders. His appointment to the Board of Directors of the Company and his acquisition of Company stock was based upon the consummation of the acquisition of MIT. The shares issued to Mr. Warner were returned to Company treasury and cancelled.
The Company has announced that its business strategy is to spin off certain acquired entities, but this strategy is subject to the successful completion of negotiations to acquire the acquisition capital, and there can be no assurance that said negotiations will ever be completed. The Company has only discussed the possibility of a spin off with AmeriStar Mortgage, Inc., and there can be no assurance that such a spin off will ever be completed without the additional influx of capital.
RECENT DEVELOPMENTS
On October 27, 1999, AmeriStar Corp., ("AmStar") a Nevada corporation was incorporated, and on January 25, 2000, the Company entered into a merger agreement to merge AmStar with JetCo, Inc., a Delaware corporation, which subsequently changed its name to InTechnologies, Inc. ("Intec"). Prior to the the merger, Ameristar subscribed for 4,800 shares of AmStar, which resulted in the Company receiving 12,000,000 shares of Intec after the merger, which represents an approximate 48% interest. InTechnologies, Inc. is a development stage company incorporated on April 27, 1998. Intec expects to initially fund its activities through funds derived from a private investor. AmStar executed and agreement with an investor to borrow up to $65 million. All or portions of this debt are required to be converted into shares of Intec, provided certain terms and conditions are met, the principal one of which relates to the market price of Registrant's stock on the maturity date of each debt advance. A copy of the Loan Agreement and Subscription Agreement have been filed as exhibits to the Registrant's 8-K Current Report (Exhibits 10.2 and 10.3, respectively) and are incorporated herein in their entirety. The description of each exhibit contained in this registration statement is modified by such reference.
Intec intends to acquire businesses that develop and distribute information technology products and services to government and industry. Registrant also intends to make investments in early stage companies that have developed computer, communication and Internet technologies that can be distributed through businesses in which Intec holds an interest or can benefit from the expertise of Intec's management or the management of one of such acquired businesses. Senior executives of Intec have identified a number of companies which have developed cutting edge technologies in the fields of computer and telephone technologies, although no agreements have been reached with any of them.
Up to $65 million of the financing for Intec's intended acquisitions, investments and working capital may be obtained from a Florida resident. The entire amount of the loan is dependent upon the happening of certain conditions. The loan agreement requires the advance to Intec of $3.5 million upon either (a) Intec's common stock closing at a price of at least $5.00 per share on at least 20 days out of 30 days with an average trading volume of at least 15,000 shares per day, or (b) when Intec has agreements with at least three companies approved by the investor with the only remaining condition to closing with such companies being the actual advance to Intec of $3.5 million.
Subsequent to this first advance, the loan agreement provides for three closings in the amount of $10,500,000 each and, then, three closings each in the amount of $10,000,000 scheduled in sequence. Each closing is subject to the daily closing market price of Intec's common stock being at least $5.00 per share and trading at an average volume of at least 15,000 shares per day for at least 20 out of the preceding 30 days. The individual loans funded in this manner bear interest at the rate of 6% per annum (18% per annum after maturity) and each is for a term of one year.
Simultaneously with the execution of the loan agreement, the investor subscribed to shares of Intec's common stock. Under the subscription agreement, the investor is required to purchase 5,000,000 shares at a price of $7.00 per share and 3,000,000 shares at a price of $10.00 per share, for an aggregate investment of $65 million. As each loan is closed (after the first loan), the investor is obligated to deliver to Intec the note received by the investor at the preceding loan closing. Therefore, in order to obtain cancellation of the loans made to Intec and receive the Intec's shares to which the investor subscribed, Intec's common stock must continue to trade at a price of $5.00 per share with an average trading volume of at least 15,000 shares for at least 20 out of 30 days between each loan closing. In the event the closing price of Intec's common stock does not reach $5.00 for the required period of time prior to the maturity of an outstanding loan (approximately one year), Intec would be required to pay such outstanding loan. In such case, it is not likely that Intec will have sufficient funds with which to meet the obligation, resulting in Intec being forced to sell assets at below market prices or allow the loan obligation to go into default. Intec intends to make investments in early stage companies that have developed computer, communication and Internet technologies that can be distributed through businesses in which Intec holds an interest or can benefit from the expertise of Intec's management or the management of one of such acquired businesses. Senior executives of Intec have identified a number of companies which have developed cutting edge technologies in the fields of computer and telephone technologies, although no agreements have been reached with any of them.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's expectation of results and other forward-looking statements contained in this registration statement involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from those expected are the following: business conditions and general economic conditions; competitive factors, such as pricing and marketing efforts; and the pace and success of product research and development. These and other factors may cause expectations to differ.
YEAR 2000 COMPLIANCE
With respect to Year 2000 compliance, the Company has performed an audit of all of its computer hardware, internal accounting and software applications; in short, all of its information technology and non information technology systems, and found all to be Year 2000 compliant. As of this date, the Company has been given assurances from its banking institution and transfer agent that they are working toward compliance or are in compliance. The Company has completed an audit of its suppliers to identify relevant Year 2000 issues, and has found them all to be Year 2000 compliant. The status of the company's progress is that it has completed all that it must do in order to be considered Year 2000 compliant. The worst case scenario would be the risk that the company's transfer agent may have not complied adequately. However, the transfer agent has assured the Company that it is Year 2000 compliant. The Company had nominal costs in becoming compliant, consisting of employee labor and no actual costs to any third parties. The Company does not anticipate any additional remediation costs, as it is already Year 2000 compliant. The Company has expert Year 2000 solution providers at its disposal in CVS Technologies, Inc., which has developed a Server 98 compliant 4 digit real time clock, designed exclusively for servers, and the management of which is experienced with Year 2000 audits and solving Year 2000 problems. The Company's contingency plans to handle a Year 2000 crisis, if one occurs, with its bank, transfer agent, or other third party, is to offer a Year 2000 audit and permanent solution to said third parties. The Company does not anticipate such a crisis to occur.
Item 7.
Item 7. FINANCIAL STATEMENTS
Ameristar's financial statements for the years ended December 31, 1999, 1998 and 1997 are included on pages through under Item 13.
Item 8.
Item 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The former accountant, Schvaneveldt and Company, did not resign, or decline to stand for re election. It was dismissed by the Company on March 31, 1999. The principal accountant's report on the financial statements for the past two years contained a statement to the effect that the company has an accumulated deficit at July 31, 1998, and that these factors raise substantial doubt about the Company's ability to continue as a going concern. The statement has been adopted by the current accountant without modification in his following reports. The decision to change accountants was approved by the Board of Directors. There were no disagreements with the former accountant on any matter of accounting principle, or practice, financial statements disclosure or auditing scope or procedure. In fact, the former accountant has indicated his agreement with the statements made by the Company concerning the change in the Company's independent accountant. The Company has fully authorized the former accountant to respond fully to the inquiries of the successor accountant concerning all of the Company's financial reports and audits. The new accountant, Roger G. Castro, was engaged on April 1, 1999.
PART III.
Item 9.
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors are elected by the shareholders to terms of one year. Officers serve at the pleasure of the Board of Directors, and serve one year terms unless removed by the Board prior to their terms.
The Executive Officers of the Company and its subsidiaries, and their ages, are as follows:
Name Age Position ---------- --- -------- O. Russell Crandall 55 Chairman, CEO, Director Ameristar and Intec
James R. Herbert 60 Vice President, Director AmeriStar Network, Inc. Vice President, Dir., Intec
David Tew 33 Director AmeriStar Network, Inc. and President, AmeriStar Mortgage
Tracy Gnagy 43 Secretary, Ameristar Secretary/Director, Intec
Charles W. Marsh, III 33 Vice President, Director AmeriStar Mortgage, Inc. William M. Noe 58 President, COO, Director InTechnologies, Inc.
Gregory L. Layton 47 Sr. Vice President, Director InTechnologies, Inc.
S. Allen Selby 62 Vice President, Intec
James P. Walters 45 Vice President, CFO, Director, Intec
John H. Dunmar 57 Vice President, Intec
Harltey J. Chazen 64 Secretary, Intec
O. Russell Crandall, Jr. Mr. Crandall is the founder of AmeriStar Network, Inc., and current President, CEO, Chief Financial Officer, and Director of the Company, and has been President, Chief Financial Officer and Director since inception. He is also the Chairman and Chief Executive Officer of InTechnologies, Inc., since January 25, 2000. From August of 1994 to June of 1996, Mr. Crandall was the Executive Vice President and Secretary/Treasurer of CompuLoan Financial Services Group, a Salt Lake City mortgage broker and computer loan origination company, and was responsible for development of the software system and organization and management. He developed participating mortgage lender lists in excess of 65 lenders, and was responsible for RESPA compliance. During his tenure, he managed a staff of over 30 employees in loan processing, loan origination and loan closing. From June of 1992 to May of 1993, Mr. Crandall was a loan specialist with Commonwealth United Mortgage, Interwest Mortgage Services. From April of 1988 to June of 1992, Mr. Crandall provided sales and consulting services in the real estate development and sales industries. He attended Boise State College from 1964 through 1967 and holds a Real Estate Certification with the State of Utah.
James R. Herbert. Mr. Herbert is a Vice President and Director of the Company, serving as such since April, 1999. He is also the Vice President and Director of CVS Technologies, Inc., the Company's wholly owned subsidiary, serving as such since inception. He is also Senior Vice President and Director of Intec, since January 25, 2000, and Since 1993, he has been involved as a consultant in real estate development, finance and consulting, including $30-40 million in Oil and Gas Development packages in Texas and Louisiana. Together with his partners, referred to as fellow investors in real estate and business finance ventures, including Tracy Gnagy, his partnership, TJ Ventures, of which he is general partner, has four business and real estate financing projects in progress totaling $12-15 million. His partners include Tracy Gnagy. Since 1993, he has also been consultant to STS Power Pedal and World Power Bike, Inc., which holds the exclusive world rights to a new scientific crank system for pedaling bicycles. From 1987 through 1993 he was Director of Sedona Industries, Ltd., a Canadian public company listed on the Toronto Stock Exchange, which held the exclusive rights to "The Fry Machine" and "Future Fries," a french fry vending machine system. From 1987 through 1993 he also acted as a financial consultant to individual clients in California, Arizona and Texas, and he held the exclusive rights to a leveraged and hedged U.S. government bond program and was active in this program with Global Funding Group. From 1980 through 1987 he was involved in real estate development projects, including being 50% owner of Cahava Developments, Inc., which prepared development of 947 acres in Cave Creek, Arizona, which was sold and became an Arnold Palmer Signature Golf Course. He also developed a 1500 acre parcel in West Austin hill country in conjunction with the Herman Bennett Company. In 1981 he acquired 40 acres as part of a joint venture on a 960 acre housing tract in West Fort Worth, Texas. From 1979 through 1980, he was involved in real estate development, and acquired, zoned and developed 2,000 land acres near Midland Texas, and held a 1/3 interest in a 640 acre development of Green Tree Golf and Country Club in Midland, Texas. From 1973 through 1979, he was engaged in real estate development, and formed and operated Venture Mortgage Corporation in Vancouver, B.C., and Edmonton, Alberta, Canada, providing loan origination and servicing for several lenders, including Eastern Canada Pension Funds and The Dominion Life Assurance Company. He holds an AACI degree from the Appraisal Institute of Canada, through the University of British Columbia, 1963.
David W. Tew. Mr. Tew is the Director of the Company, serving since May, 1999. He is also the President and Director since inception of AmeriStar Mortgage, Inc., a Company subsidiary. Since 1997 he has been engaged in commercial mortgage banking and asset finance group in Columbia, South Carolina, doing business as Access Business Capital. From 1991 through 1996, he operated a consulting practice which specialized in small business finance, mergers and acquisitions, divestures, and human resource management. From 1989 through 1991, he was President of Carolina Music and Video. From 1986 through 1988 he was Owner Operator of Designing Edge Marketing and Programs, wherein he devised advertising programs and performed satisfaction surveys for companies. He has been a Certified Professional Management Consultant since January, 1996, and a Certified Professional Consultant since February, 1996.
Tracy Gnagy. Ms. Gnagy is the Treasurer and Director of CVS Technologies, Inc., a wholly owned company subsidiary, and the Secretary of the Company and Secretary of Intec. Since December, 1990, she has also been President and Director of S.C.R.E. Development Corporation, performing accounting functions for this real estate holdings company. Since March, 1981 she has also been engaged as the Accountant and Chief Administrator for Mather Oil and Gas, Inc., Mather Corporation, Venture Properties, Venture Holdings, Inc., Texacan Investments, Inc., Bermon Management, Inc. and Cahava Development, Inc.. From June, 1979 through March, 1981 she was employed as accountant for Block Bros. Realty, Vancouver, B.C. From June 1975 through June, 1979, she was employed by Placer Development Corporation, performing accounting functions. She holds a degree in Accounting from the British Columbia Institute of Technology.
Charles W. Marsh III. Mr. Marsh is a Vice President and Director of AmeriStar Mortgage, Inc., and has been an officer and director of AMI since its inception. Since 1997 he has been engaged in commercial mortgage banking and asset finance group in Columbia, South Carolina, doing business as Access Business Capital. From 1995 through 1997, he was employed as Principal Consultant and Senior Vice President of Spectrum Consulting in Fayetteville, North Carolina. From 1988 through 1995, he was employed by the United States Army, Special Warfare Command, as Operations Manager. He has training from Liberty University in Lynchburg, Virginia, Fayetteville Community College and undertook the Special Forces Operations and Intelligence Course at Fort Bragg, North Carolina.
William M. Noe is President and Chief Operating Officer and a member of the Board of Intec. Based in New York City, Mr. Noe has 35 years' experience in real estate development and venture capital finance. In 1974, he founded Asset Development Corporation, a financial consulting company and serves as its Chief Executive Officer. On March 3, 2000, Mr. Noe became Chairman of the Board, Managing Director and Chief Executive Officer of Dixie International Construction Resources Ltd ("DICRL"), a Canadian company that manufactures and distributes construction materials to building contractors in Ontario, Canada. Since 1997 to present, Mr. Noe has served as Chairman of Caribbean Building Systems Ltd., a construction company based in the West Indies and as President and a director of its affiliate in the United States, Caribbean Building Systems (North America), Inc. Commencing in August 1999, Mr. Noe became the Managing Director of Techtanica Enterprises, a building materials company based in Canada which merged with DICRL on March 3, 2000. Commencing in August 1999, Mr. Noe became the Chief Financial Officer of Interactive Entertainment Development, Inc., an Internet portal and content development company. Mr. Noe was Chief Financial Officer of Dynamatic Corporation, a privately owned construction component company during 1995, which later merged with a public company. Mr. Noe holds an M.B.A.(Finance) from the Harvard Business School and a B.A. (Economics) from the University of Southern California.
Gregory J. Layton is Vice President - Business Development of Intec. Mr. Layton has a wide and varied background in managing, growing and turning around companies both private and public. From 1997 to the present, Mr. Layton has been a consultant to several companies in high-tech industries and is a syndicated partner with Boles, Knop & Company, an investment banking firm specializing in high-tech mergers and acquisitions. From September 1996 to October 1997, Mr. Layton was VP, Sales and Marketing for Sysorex Information Systems, Inc., a $150 million PC systems integration company. From September 1994 to August 1996, Mr. Layton was VP of Business Development for Government Technology, a technology newspaper publisher serving state and local governments.
S. Allen Selby is Executive Vice President of Intec. Since 1990, Mr. Selby has been principal of his own consulting company specializing in the acquisition of private companies and their operational reorganization and marketing repositioning. On March 3,2000, Mr. Selby became the Senior Vice President- International of DICRL. Mr. Selby is a graduate of Yale University with a degree in Engineering.
James F. Walters, is Senior Vice President - Finance, Treasurer and Chief Financial Officer and is a member of the Board of Directors of Intec. Since 1995, Mr. Walters has been Chairman of the Board and responsible for the overall management of Kellogg & Andelson Accountancy Corporation, an 80-person accountancy firm which Mr. Walters joined in 1976. Mr. Walters has assisted the firm's clients in connection with the preparation of their initial public offerings, private finance, merger, acquisition and restructuring strategies.
John H. Dunmar is Vice President - Marketing of Intec. In 1992, Mr. Dunmar founded The Dunmar Consulting Group, a project management and consulting services company, and has served as its owner-operator from 1992 to the present. From 1992 to August 1999, Mr. Dunmar served as Vice President and Director of Account Services of Coe & Co. Inc., an advertising consulting company. Mr. Dunmar holds an M.B.A. from American Graduate School of International Management and a B.S. in Engineering from the University of California Los Angeles.
Hartley J. Chazen is Intec's secretary. Mr. Chazen has practiced corporate and securities law for more than 30 years. He is Of Counsel to McLaughlin & Stern, LLP, New York City, which acts as Registrant's general counsel.
FAMILY RELATIONSHIPS.
There are no family relationships among directors, executive officers or other persons nominated or chosen by Ameristar to become officers or executive officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
Ameristar is not aware of any material legal proceedings involving any director, director nominee, promoter or control person including criminal convictions, pending criminal matters, pending or concluded administrative or civil proceedings limiting one's participation in the securities or banking industries, or findings of securities or commodities law violations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934 requires Ameristar's officers and directors, and persons who own more than ten percent of a registered class of Ameristar's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "SEC"). Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish Ameristar with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons, Ameristar believes that, during the fiscal year ended December 31, 1999, all filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.
Item 10.
Item 10. EXECUTIVE COMPENSATION
The following table sets forth the cash and non-cash compensation paid by the Company to its Chief Executive Officer and all other executive officers for services rendered up to the period ended March 31, 1999. No salaries are being paid at the present time, except to the Company president, O. Russell Crandall. The salaries of executive officers will accrue and be owed by the Company, unless there is available cash flow from operations to pay salaries. There were no grants of options or SAR grants given to any executive officers during the last fiscal year, except for O.Russell Crandall, who holds an option to repurchase 2,700,000 shares formerly held by him at $.50 per share. AmeriStar Mortgage, Inc. officers receive a commission of 60% of all earned premiums on loans closed by AmeriStar Mortgage, Inc. They do not receive any fees from the transaction fees generated by the parent Company, AmeriStar Network, Inc.
Annual Compensation -------------------
Name and Position Salary Bonus Annual Deferred Salary ----------------- ------ ----- ---------------------- O. Russell Crandall, Jr. $69,600 -0-
(1) Mr. Crandall's salary is now $5800.00 per month, and has accrued at that rate since November, 1999.
Item 11.
Item 11. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of the shares of Common Stock of the Company as of the date of this disclosure(1), by (I) each person who is known by the Company to be the beneficial owner of more than five percent (5%) of the issued and outstanding shares of common stock, (ii) each of the Company's directors and executive officers, and (iii) all directors and executive officers as a group.
Name and Address Number of Shares Percentage Owned - ---------------- ---------------- ---------------- O. Russell Crandall(2) 625,000 3.21% 203 South 1430 West #138-6 Hurricane, UT 84737
Scott Stratton(5)(10) 1,833,332 9.43% 5161 San Felipe, Apt. 320 Houston, TX 77056
James R. Herbert(5)(9) 916,667 4.71% 21 Rippling Creek Dr. Sugarland, TX 77479
Leslie Catsman Avery(5)(8) 1,833,334 9.43% 3 South 281 Park Blvd. Glen Ellyn, IL 60137
David Tew(6) 250,000 1.29% 6198 Goldfinch Dr. Rayetteville, NC 28306
Tracy Gnagy(7)(9) 2,916,667 14.99% 21 Rippling Creek Dr. Sugarland, TX 77479
Michael Avery(5)(8) 1,833,334 9.43% 3 South 281 Park Blvd. Glen Ellyn, IL 60137
William Noe 3,000,000 15.43% 138 E. 94th St. #6E New York, NY 10128
Gregory Layton 1,000,000 5.14% 2950 Chichester Lane Fairfax, VA 22031
Officers and Directors 12,375,000 63.63% as a Group
(1) Table is based on current outstanding shares of 19,448,712, as opposed to the 10,198,712 reported on the December 31, 1999 audited financial statements.
(2) O. Russell Crandall, Jr. is the President and Director of the Company. His current holdings are now 625,000 of common stock. He is the Trustee of the O. Russell Crandall Family Trust, which holds title to all of his shares. He formerly owned 3,325,000 shares, 2,700,000 of which were returned to the Company treasury, and he holds an option to repurchase them at $.50 per share.
(3) These individuals are former officers and directors of the Company, who are no longer affiliated with the Company. Their shares have not been included in "Officers and Directors as a Group". Shirman and Mary Milliner jointly own the shares listed, and each is the beneficial owner of the total 525,000 shares. 225,000 of these shares are in Shirman Milliner's name and 300,000 shares are in Mary Milliner's name, but neither of them disclaims beneficial ownership of the shares held by the other.
(5) These individuals received shares on April 16, 1999, as a result of the acquisition of 100% of the outstanding stock of CVS Technologies, Inc. by the Company.
(6) Mr. Tew is the Vice President and Director of the Company. He is also the President and Director of AmeriStar Mortgage, Inc. He received his shares in April, 1999.
(7) Ms. Gnagy is an officer of the company and an officer and director of CVS Technologies, Inc., the Company's wholly owned subsidiary. She received her shares in April 1999.
(8) Mr. Avery and Leslie jointly own the shares listed, and each is the beneficial owner of the total of 1,833,334 shares. 916,667 shares are in Mr. Avery's name and 916,667 shares are in Leslie Avery's name, but neither of them disclaim beneficial ownership of the shares held by the other. Both Leslie Avery and Michael Avery are no longer officers or directors of the Company or of CVS.
(9) Ms. Gnagy and Mr. Herbert are business partners and share a home office in Ms. Gnagy's home. Mr. Herbert uses this address as his mailing address and physical address, because he owns a small house on the other side of Houston that he only uses from time to time.
(10) Mr. Stratton is no longer an officer or director of the Company or CVS.
Item 12.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
O. Russell Crandall, Jr. is the sole founder, promoter, and organizer of the Company.
The Company rents its offices from MIT on a month to month basis on an arms length basis for an insignificant amount of monthly rental. The 350,000 shares were issued to O. Russell Crandall at inception for marketing rights assigned to the company for Mr. Crandall's Internet Marketing concept.
On April 16, 1999, the Company issued 5,500,000 restricted common shares of company stock to five individuals, in exchange for 100% of the outstanding shares of CVS Technologies, Inc. Owned by these individuals, in reliance upon Section 4(2) of the Securities Act of 1933. Scott Stratton, the Vice President and Director of the Company, and Vice President and Director of CVS, received 1,833,332 of these 5,500,000 shares. James R. Herbert, the Vice President and Director of the Company and Vice President and Director of CVS, received 916,667 of these shares. Leslie Avery, the Secretary and Director of the Company, and the Secretary and Director of CVS, received 916,667 of these shares, and her husband, Michael Avery, received 916,667 shares. Tracy Gnagy, the Treasurer and Director of CVS, received 916,667 shares. (See Item 4 - Securities Ownership of Certain Beneficial Owners and Management.)
On April 25, 1999, the Company issued 250,000 of company restricted common stock to David Tew, the Director of the Company and President and Director of AmeriStar Mortgage, Inc., in exchange for 100% of the outstanding stock of AmeriStar Mortgage, Inc., owned by Mr. Tew, in reliance upon an exemption from registration contained within Section 4(2)of the Securities Act of 1933, as amended.
On March 9, 1998, the Company issued 280,000 shares of restricted common stock to David Werner, which were subsequently issued pursuant to Section 4(2) of the Securities Act of 1933, as amended, in conjunction with the Company's intended acquisition of Mortgage Internet Technologies, Inc. (MIT). The acquisition negotiations have been canceled by MIT, and Mr. Warner has returned his shares for cancellation.
On March 9, 1998, the Company authorized the issuance of 2,700,000 restricted common shares to the O. Russell Trust in consideration of past services rendered. The shares were subsequently issued pursuant to Section 4(2) of the Securities Act of 1933. The shares were returned to treasury in exchange for options to purchase the shares for $.50 per share, which option expires in five years.
In June, 2000, William Noe, the President and Chief Operating Officer of Intec, was issued 3,000,000 shares of common stock, pursuant to Section 4(2) of the Securities Act of 1933, in exchange for consulting services rendered the company in the development of a business plan. He was also issued options to purchase 750,000 shares of company common stock at $.25 per share. Mr. Noe is a sophisticated investor who had full access to all corporate and financial information.
There have been no other transactions since the beginning of fiscal year 1998, or any currently proposed transactions, or series of similar transactions, to which the Company was or is to be a party, in which the amount involved exceeds $60,000, and in which any of the officers, or directors, or holders of over 5% of the Company's stock have or will have any direct or indirect material interest. The Company does not currently have any policy toward entering into any future transactions with related parties.
Item 13.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K.
13(a) (1)Report of Independent Certified Public Accountant August 14, 2000 Financial Statements Balance Sheets Statement of Loss And Accumulated Deficit Statements of Cash Flows Statement of Stockholder's Equity Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable (c) Exhibits
Exhibit No. Description ----------- ----------- 3.1(a) Certificate of Incorporation AmeriStar Network, Inc. 3.1(a)1 Certificate of Incorporation AmeriStar Mortgage, Inc. 3.1(a)2 Certificate of Incorporation CVS Technologies, Inc. 3.1 3.2 (a) By-laws AmeriStar Network, Inc. 3.2(b) Amended and Restated By Laws 3.2(c) By-laws AmeriStar Mortgage, Inc. 3.2(d) By-laws CVS Technologies, Inc. 4 (a) Specimen certificate of common stock 4(a)1 Specimen Certificate of Warrant
10 Other Documents
(a) Mortgage Internet Technologies, Inc. Intellectual Properties Partial Assignment
(b) Mortgage Internet Technologies, Inc. Wholesale Lending Center License Agreement
(c) Agreement and Plan of Merger with Jetco
(d) Articles of Incorporation of Jetco
(e) By laws Jetco
(f) Loan Agreement
(g) Subscription agreement
(h) Press release
(i) Avery settlement agreement
[CAPTION] AMERISTAR NETWORK, INC. (A Development Stage Company) Consolidated Balance Sheets September 30, December 31, 2000 1999 ------------- ------------ (Unaudited) ASSETS Current Assets: Cash in banks $ 36,275 $ 5,176 Notes receivable 28,000 13,000 Investment - Intechnologies, Inc. 48 ------------- ------------ Total Current Assets 64,323 18,176 ------------- ------------
Property & Equipment: Furnitures and equipment 22,269 22,269 Less: accumulated depreciation (6,651) (3,375) ------------- ------------ Total Fixed Assets 15,618 18,894 ------------- ------------ Other Assets: Software distribution rights (net of amortization) 136,526 139,854 ------------- ------------ Total Other Assets 136,526 139,854 ------------- ------------ TOTAL ASSETS $ 216,467 $ 176,924 ============= ============ LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 233,841 $ 152,948 Accrued expenses 4,928 15,316 Short term notes payable 2,300 1,000 ------------- ------------ Total Current Liabilities 241,069 169,264 ------------- ------------ Stockholders' Equity: Preferred stocks, $.001 par value Authorized shares - 10,000,000 Issued and oustanding shares- none - - Common stocks , $.001 par value Authorized shares - 90,000,000 Issued and oustanding shares- 19,728,712 shares 19,729 10,199 Paid in capital 3,246,570 1,401,874 Subscriptions receivable (246,793) (249,400) Deficit accumulated during the development stage (3,044,108) (1,155,013) ------------- ------------ Total Stockholders' Equity (24,602) 7,660 ------------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 216,467 $ 176,924 ============= ============
See consolidated notes to financial statements