10SB12G: Registration of securities for small business [Section 12(g)]
Published on April 19, 1999
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of the Securities Exchange Act of 1934
SICLONE INDUSTRIES, INC.
(Name of Small Business Issuer in its charter)
DELAWARE 87-042699
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6269 Jamestown Court, Salt Lake City, Utah 84121
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(Address of principal executive Offices) (Zip Code)
Issuer's telephone number: 801-566-6627
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
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Securities to be registered under Section 12(g) of the Act:
COMMON
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(Title of Class)
INFORMATION REQUIRED IN REGISTRATION STATEMENT
This Form 10-SB contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-SB that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe",
"anticipate," "estimate" or "continue" or comparable terminology are
intended to identify forward-looking statements. These statements by their
nature involve substantial risks and uncertainties, and actual results may
differ materially depending on a variety of factors, many of which are not
within the Company's control. These factors include but are not limited to
economic conditions generally and in the industries in which the Company
may participate; competition within the Company's chosen industry,
including competition from much larger competitors; technological advances
and failure by the Company to successfully develop business relationships.
PART I
Item 1. Description of Business.
Siclone Industries, Inc., ("Siclone" or the "Company") was originally
incorporated in Delaware on November 1, 1985 as McKinnely Investments, Inc.
The Company changed its name to Accoline Industries, Inc. on November 5,
1986 and again changed its name to Siclone Industries, Inc. on May 24,
1988.
The Company has not had active business operations since its
inception. In 1993, the Company entered into an agreement with Bradley S.
Shepherd in which Mr. Shepherd agreed to become an officer and director of
the Company and use his best efforts to organize and update the books and
records of the Corporation and seek business opportunities for acquisition
or participation by the Company. As of February 12, 1996, the Company has
been reinstated with the state of Delaware and is actively seeking a
business opportunity in which to participate.
The Company intends to seek, investigate, and if warranted, acquire an
interest in a business opportunity. The Company does not propose to
restrict its search for a business opportunity to any particular industry
or geographical area and may, therefore, engage in essentially any business
in any industry. The Company has unrestricted discretion in seeking and
participating in a business opportunity, subject to the availability of
such opportunities, economic conditions and other factors.
The selection of a business opportunity in which to participate is
complex and extremely risky and will be made by management in the exercise
of its business judgment. There is no assurance that the Company will be
able to identify and acquire any business opportunity which will ultimately
prove to be beneficial to the Company and its shareholders.
2
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no
specific business and may acquire or participate in a business opportunity
based on the decision of management which will, in all probability, act
without the consent, vote, or approval of the Company's shareholders.
Reports to Security Holders
Prior to the filing of this registration statement on Form 10, the
Company was not subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act. Upon effectiveness of this registration
statement, the Company will file annual and quarterly reports with the
Securities and Exchange Commission ("SEC"). The public may read and copy
any materials filed by the Company with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The Company is an electronic filer
and the SEC maintains an Internet site that contains reports and other
information regarding the Company which may be viewed at
http://www.sec.gov.
Sources of Opportunities
It is anticipated that business opportunities may be available to the
Company from various sources, including its officers and directors,
professional advisers, securities broker-dealers, venture capitalists,
members of the financial community, and others who may present unsolicited
proposals.
The Company will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officers and
directors as well as indirect associations between them and other business
and professional people. Although the Company does not anticipate engaging
professional firms specializing in business acquisitions or
reorganizations, if management deems it in the best interests of the
Company, such firms may be retained. In some instances, the Company may
publish notices or advertisements seeking a potential business opportunity
in financial or trade publications.
Criteria
The Company will not restrict its search to any particular business,
industry or geographical location. The Company may acquire a business
opportunity or enter into a business in any industry and in any stage of
development. The Company may enter into a business or opportunity
involving a "start up" or new company. The Company may acquire a business
opportunity in various stages of its operation.
In seeking a business venture, the decision of management of the
Company will not be controlled by an attempt to take advantage of an
anticipated or perceived appeal of a specific industry, management group,
or product or industry, but will be based upon the business objective of
seeking long-term capital appreciation in the real value of the Company.
3
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; the history of
operations, if any; prospects for the future; the nature of present and
expected competition; the quality and experience of management services
which may be available and the depth of that management; the potential for
further research, development or exploration; the potential for growth and
expansion; the potential for profit; the perceived public recognition or
acceptance of products, services, trade or service marks, name
identification; and other relevant factors.
To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the
other firm's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, and
numerous other factors which are difficult, if not impossible to analyze
through the application of any objective criteria. In many instances, it
is anticipated that the results of operations of a specific firm may not
necessarily be indicative of the potential for the future because of the
requirement to substantially shift marketing approaches, expand
significantly, change product emphasis, change or substantially augment
management, or other factors.
Generally, the Company will analyze all available factors in the
circumstances and make a determination based upon a composite of available
facts, without reliance upon any single factor as controlling.
Methods of Participation of Acquisition
Specific business opportunities will be reviewed and, on the basis of
that review, the legal structure or method of participation deemed by
management to be suitable will be selected. Such structures and methods
may include, but are not limited to, leases, purchase and sale agreements,
licenses, joint ventures, other contractual arrangements, and may involve a
reorganization, merger or consolidation transaction. The Company may act
directly or indirectly through an interest in a partnership, corporation,
or other form of organization.
Procedures
As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check references of management and key
personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with written
materials regarding the business opportunity containing such items as a
description of product, service and company history; management resumes;
financial information; available projections with related assumptions upon
which they are based; an explanation of proprietary products and services;
evidence of existing patents, trademarks or service marks or rights
thereto; present and proposed forms of compensation to management; a
description of transactions between the prospective entity and its
affiliates; relevant analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; and other
information deemed relevant.
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Competition
The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is from
other companies organized and funded for similar purposes, small venture
capital partnerships and corporations, small business investment companies
and wealthy individuals.
Employees
The Company does not currently have any employees but relies upon the
efforts of its officers and directors to conduct the business of the
Company.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL STATEMENTS
Plan of Operation
The Company has little cash and has experienced losses from inception.
As of December 31, 1998, the Company had cash of $4,241 on hand. As of
that date, the Company had no outstanding liabilities. The Company has no
material commitments for capital expenditures for the next twelve months.
As of the date of this Form 10-SB, the Company has yet to generate
positive cash flow. Since inception, the Company has primarily financed
its operations through the sale of common stock.
The Company believes that its current cash needs can be met with the
cash on hand for at least the next twelve months. However, should the
Company obtain a business opportunity, it may be necessary to raise
additional capital. This may be accomplished by selling common stock of
the Company.
Management of the Company intends to actively seek business
opportunities for the Company during the next twelve months.
The Year 2000 - Millennium Bug
This concern, known as "The Year 2000" problem or "The Millennium Bug"
is expected to effect a large number of computer systems and programs after
the year 1999. The concern is that any computer function that requires a
date calculation may produce errors or system failures. As a result,
computer systems and/or software used by many companies will need to be
upgraded to comply with "Year 2000" requirements. The Company is presently
evaluating the impact of the Year 2000 issue as it affects its business
operations and interfaces . To date, the Company is unaware of any
situation of noncompliance that would materially adversely effect its
operations or financial condition. There can be no assurance, however,
that instances of noncompliance which could have a material adverse effect
on the Company's operations or financial condition have been identified.
Additional, there can be no assurance that the systems of other companies
with which the Company transacts business will be corrected on a timely
basis, or that failure by such third party entities to correct a Year 2000
problem, or a correction which is incompatible with the Company's
information systems, would not have a material adverse effect on the
Company's operations or financial condition.
Item 3. Description of Property
The Company does not currently own any property. The Company utilizes
office space in the residence of Bradley S. Shepherd at no cost. Until
such time as the Company pursues a viable business opportunity and
recognizes income, it will not seek independent office space.
Item 4. Security Ownership of Certain Beneficial Owners and
Management; Changes in Control
The following table sets forth as of April 1, 1999, the name and the
number of shares of the Registrant's Common Stock, par value $0.001 per
share, held of record or beneficially by each person who held of record, or
was known by the Registrant to own beneficially, more than 5% of the
23,810,000 issued and outstanding shares of the Registrant's Common Stock,
and the name and shareholdings of each director and of all officers and
directors as a group.
(1) Officer and/or director
There are no contracts or other arrangements that could result in a
change of control of the Company.
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Item 5. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth as of April 1, 1999, the name, age, and
position of each executive officer and director and the term of office of
each director of the Corporation.
All officers hold their positions at the will of the Board of
Directors. All directors hold their positions for one year or until their
successors are elected and qualified.
Set forth below is certain biographical information regarding each of
the Company's executive officers and directors:
Bradley S. Shepherd. Director, President, Secretary/Treasurer, age
38. Mr. Shepherd is the owner and manager of Shepherd's Allstar Lanes,
Inc., a bowling center, restaurant, and lounge located in West Jordan,
Utah. After managing the business for three years, Mr. Shepherd purchased
the business in June of 1993.
Mr. Shepherd also manages and is trustee for the Roger L. Shepherd
Family Trust which owns and leases commercial office and warehouse
buildings and residential properties in the Salt Lake City area.
Mr Shepherd also serves as Director, President, Secretary, and
Treasurer of Patriot Investment Corporation, a Nevada corporation. Patriot
Investment Corporation is a publicly held company seeking to acquire an
interest in a business opportunity. Mr. Shepherd was elected to these
offices in December of 1994 by shareholders holding a majority of the
issued and outstanding shares of the company.
Prior to his current business activities, Mr. Shepherd spent 10 years
working in the securities industry as an account representative and then
securities trader for R.A. Johnson Company, Inc., and then Olsen Payne and
Company, both Salt Lake City, brokerage firms.
To the knowledge of management, during the past five years, no present
or former director, executive officer or person nominated to become a
director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or any
partnership in which he was a general partner at or within two years before
the time of such filing, or any corporation or business association of
which he was an executive officer at or within two years before the time of
such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations or other minor
offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or otherwise
limiting, the following activities;
(I) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, associated person of any of the foregoing, or as an
investment advisor, underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment company, or
engaging in or continuing any conduct or practice in connection with such
activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any violation of
federal or state securities laws or federal commodities laws;
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60 days
the right of such person to engage in any activity described above under
this Item, or to be associated with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission to have violated any federal
or state securities law, and the judgment in such civil action or finding
by the Securities and Exchange Commission has not been subsequently
reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
Item 6. Executive Compensation.
The following table sets forth certain summary information concerning
the compensation paid or accrued for each of the Registrant's last three
completed fiscal years to the Registrant's or its principal subsidiaries
chief executive officers and each of its other executive officers that
received compensation in excess of $100,000 during such period (as
determined at December 31, 1998, the end of the Registrant's last completed
fiscal year).
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(1) Mr. Shepherd was granted a three year option to acquire up to
12,000,000 shares of the Company's restricted Common stock at an exercise
price of $.001 per share on April 15, 1993 as an inducement to become an
officer and director of the Company. In 1996, Mr. Shepherd exercised his
option to acquire all 12,000,000 shares of restricted Common stock.
Compensation of Directors
None.
Employment Contracts and Termination of Employment and Change in Control
Arrangement
There are no employment contracts between the Company and any of its
officers or directors.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the company or its subsidiaries, or any
change in control of the Company, or a change in the person's
responsibilities following a changing in control of the Company.
Item 7. Certain Relationships and Related Transactions.
In 1993, the Company granted Bradley S. Shepherd an option to purchase
up to 12,000,000 shares of the Company's Common stock at an exercise price
of $0.001 as an inducement to become an officer and director of the
Company. In 1996 Mr. Shepherd exercised his option for all 12,000,000
shares.
The Company utilizes office space at the residence of Mr. Shepherd to
conducts its activities at no charge to the Company.
Item 8. Description of Securities.
The Company is presently authorized to issue 30,000,00 shares of $.001
par value Common Stock. All Shares, when issued, will be fully paid and
nonassessable. All shares are equal to each other with respect to
liquidation and dividend rights. Holders of voting shares are entitled to
one vote for each share they own at any Shareholders' meeting.
9
Holders of Shares of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available therefor, and upon liquidation are entitled to participate
pro-rata in a distribution of assets available for such a distribution to
Shareholders. There are no conversion, pre-emptive or other subscription
rights or privileges with respect to any Shares.
The Common Stock of the Company does not have cumulative voting rights
which means that the holders of more than 50% of the voting shares voting
for election of directors may elect all of the directors if they choose to
do so. In such event, the holders of the remaining Shares aggregating less
than 50% will not be able to elect any directors.
The Company is also authorized to issue 5,000,000 shares of preferred
stock, par value $.001 per share. The board of directors, without
shareholder action, and within the limits set forth in the Utah Revised
Business Corporation Act, have the authority to; (a) designate in whole or
in part, the preferences, limitations and relative rights of any class of
shares before the issuance of any shares of that class; (b) create one or
more series within a class of shares, fix the number of shares of each such
series, and designate, in whole or part, the preferences, limitations, and
relative rights of the series, all before the issuance of any shares of
that series; (c) alter or revoke the preferences, limitations, and relative
rights granted to or imposed upon any wholly unissued class of shares or
any wholly unissued series of any class of shares; or (d) increase or
decrease the number of shares constituting any series, the number of shares
of which was originally fixed by the board of directors, either before or
after the issuance of shares of the series; provided that, the number may
not be decreased below the number of shares of the series then outstanding,
or increased above the total number of authorized shares of the applicable
class of shares available for designation as a part of the series. The
allocation among the series of each class of unlimited voting rights and
the right to receive the net assets of the Corporation upon dissolution,
shall be as designated by the board of directors. Shares of any class of
stock may be issued, without shareholder action, in one or more series as
may from time to time be determined by the board of directors.
The Company has appointed OTC Stock Transfer as the transfer agent and
registrar for the Company's securities.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
The Company's common stock is listed on the Over the Counter Bulletin
Board ("OTCBB"), under the symbol "SICI". As of April 1, 1999, the Company
had 291 shareholders holding 23,810,000 shares of common stock. Of the
issued and outstanding common stock, 1,110,000 are free trading, the
balance are restricted stock as that term is used in Rule 144. The Company
has never declared a dividend on its Common Stock.
The last bid for the Company's common stock was in June, 1990 and the
stock has not actively traded since that time.
The Company has not paid, nor declared, any dividends since its
inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividends is subject to
limitations imposed by Delaware law. Under Delaware law, dividends may be
paid to the extent that the corporation's assets exceed its liabilities and
it is able to pay its debts as they become due in the usual course of
business.
10
Item 2. Legal Proceedings.
No legal proceedings are threatened or pending against the Company or
any of its officers or directors. Further none of the Company's officers
or directors or affiliates of the Company are parties against the Company
or have any material interests in actions that are adverse to the Company's
interests.
Item 3. Changes in and Disagreements with Accountants.
None.
Item 4. Recent Sales of Unregistered Securities.
Shepherd Option Exercise
(b) The securities were not publicly offered. The securities were
issued to Bradley S. Shepherd in exchange for $12,000.
(c) The Company received cash consideration for the exercise of the
options. The cash was used as operating capital for the Company.
(d) The Company relied upon section 4(2) of the Securities Act of
1933 to effect the exchange of shares. All shares were exchanged in an
isolated private transaction not involving any public solicitation or
offering.
(f) All proceeds were used for working capital.
Item 5. Indemnification of Directors and Officers.
There are no provisions in the Delaware corporation law or the
Articles of Incorporation of the Registrant requiring the corporation to
indemnify any of the Registrant officers and directors. The by-laws of the
registrant provide for indemnification as follows:
The corporation shall indemnify its officers, directors,
employees and agents to the extent permitted by the General
Corporation Law of Delaware.
The Articles of Incorporation of the registrant provide for
indemnification as follows:
The Corporation shall indemnify any and all persons who may serve
or who have served at any time as director or officers, or who, at the
request of the Board of Directors of the corporation, may serve, or at
any time have served as directors or officers of another corporation
in which the Corporation at such time owned or may own shares of
stock, or which it was or may be a creditor, and the respective heirs,
administrators, successors, and assigns, against any and all expenses,
including amounts paid (before or after suite is commenced), actually
or necessarily by such persons in connection with the defense or
11
settlement or any claim, action, suit, or proceeding in which they, or
any of them, are made parties, or a party, or which may be assessed
against them or any of them, by reason of being or having been
directors or officers of the Corporation, or such other corporation,
except in relation to matters as to which any such director or officer
of the Corporation, or such other corporation, or former director or
officer shall be adjudged in any action, suit or proceeding to be
liable for his own negligence of misconduct in the performance of his
duties. Such indemnification shall be in addition to any other rights
to which those indemnified may be entitled under any law, by-law,
agreement, vote of stockholders or otherwise.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to officers and directors of the
Company pursuant to the provisions of the Company's Certificate of
Incorporation, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
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PART F/S
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants
Balance Sheet as of December 31, 1998
Statement of Operations from inception on November 1, 1985 through December
31, 1998
Statements of Stockholders' Equity for years ended December 31, 1987
through December 31, 1998
Statements of Cash Flows for the years ended December 31, 1997 and December
31, 1998 and for the Period from November 1, 1985 (Inception) through
December 31, 1998
Notes to the Financial Statements
13
PART III
Item 1. Index and Description of Exhibits.
SIGNATURES
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In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Siclone Industries, Inc.
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
President
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
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PART III
Item 1. Index and Description of Exhibits.
SIGNATURES
- ------------------------------------------------------------------------
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Siclone Industries, Inc.
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
President
Date: By: /s/ Bradley S. Shepherd
---------------------------
Bradley S. Shepherd
14
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Financial Statements
December 31, 1998 and 1997
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . 3
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . . . 6
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 10
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . 11
/Letterhead/
McGladry Network
An independently Owned Member
Worldwide Services
Through RSM International
American Institute of Jones, Jensen& Company, LLC R. Gordon Jones, CPA
Certified Public ------------------------ Mark F. Jensen, CPA
Accountants Certified Public Accountant Franklin L. Hunt, CPA
Steve M. Hanni, CPA
Utah Association of
Certified Public
Accountants
SEC Practice Section
Private Companies
Practice Section
/End Letterhead/
INDEPENDENT AUDITORS' REPORT
Board of Directors
Siclone Industries, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Siclone Industries, Inc.
(a development stage company) as of December 31, 1998 and the related
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 1998 and 1997 and from inception on November 1, 1985
through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 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 Siclone Industries,
Inc. (a development stage company) as of December 31, 1998, and the results
of its operations and its cash flows for the years ended December 31, 1998
and 1997 and from inception on November 1, 1985 through December 31, 1998,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from
operations and has no operating capital that together raise substantial
doubt about its ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/ Jones, Jensen & Company
/Letterhead/ Jones, Jensen & Company
Salt Lake City, Utah
February 5, 1999
50 South Main Street, Suite 1450, Salt Lake City, Utah 84144
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Balance Sheet
The accompanying notes are an integral part of these financial statements
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Operations
The accompanying notes are an integral part of these financial statements
5
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
The accompanying notes are an integral part of these financial statements
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
The accompanying notes are an integral part of these financial statements
8
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
The accompanying notes are an integral part of these financial statements
9
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Statements of Cash Flows
The accompanying notes are an integral part of these financial statements
SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was incorporated in the State of Delaware on November 1,
1985 under the name McKinnely Investments, Inc. In November 1986, the
Company changed its name to Acculine Industries, Incorporated and in
May 1988 to Siclone Industries, Inc.
The Company was incorporated for the purpose of providing a vehicle,
which could be used to raise capital and seek business opportunities.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a calendar year end.
c. Cash and Cash Equivalents
Cash equivalents include short-term, highly liquid investments with
maturities of three months or less at the time of acquisition.
d. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of shares outstanding at the date of the
financial statements.
e. Provision for Taxes
At December 31, 1998, the Company has net operating loss carryforwards
totaling approximately $600,000 that may be offset against future
taxable income through 2012. No tax benefit has been reported in the
financial statements, because the Company believes there is a 50% or
greater chance the loss carryforwards will expire unused.
Accordingly, the potential tax benefits of the loss carryforwards are
offset by a valuation allowance of the same amount.
f. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
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SICLONE INDUSTRIES, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 2 - RELATED PARTY TRANSACTIONS
During 1993, the Company's president purchased 1,000,000 shares of
common stock for $1,000. During 1995, the Company's president
purchased 11,000,000 shares of common stock for $11,000.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company has little
cash and has experienced losses from inception. Without realization
of additional adequate financing, it would be unlikely for the Company
to pursue and realize its objectives. The Company intends to seek a
merger with an existing operating company. In the interim an officer
of the Company has committed to meeting its operating expenses.
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