Document/Exhibit Description Pages Size
1: 10KSB Prestige 10KSB 1998 21 111K
4: EX-2 Plan of Acquisition, Reorganization, Arrangement, 2 14K
Liquidation or Succession
2: EX-3 Articles of Incorporation/Organization or By-Laws 4 14K
3: EX-3 Articles of Incorporation/Organization or By-Laws 8 37K
5: EX-10 Material Contract 2± 7K
6: EX-10 Material Contract 1 6K
7: EX-10 Material Contract 2± 8K
8: EX-27 Financial Data Schedule (Pre-XBRL) 1 7K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[X] Annual report pursuant to section 13 or 15(d)
of the Securities Exchange Act of 1934 for the fiscal
year ended December 31, 1998, or
[ ] Transition report pursuant to section 13 or
15(d) of the Securities Exchange act of 1934 for the
transition period from to
Commission File No. 33-3583-S
PRESTIGE CAPITAL CORPORATION
(Name of Small Business Issuer as specified in its charter)
(Formerly Hood Ventures, Inc.)
Nevada 93-0945181
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
311 South State, Suite 400, Salt Lake City, Utah 84111
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (801) 364-9262
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports
required to be filed by sections 13 or 15(d) of the
Exchange Act during the past 12 months (or such
shorter period that the issuer was required to file
such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [X]
Check if there is no disclosure of delinquent filers
in response to Item 405 of Regulation S-B in this
form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive
proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Registrant's revenues (consisting only of
interest income) for its most recent fiscal year: $0.
The aggregate market value of voting stock
held by non-affiliates: As of the date this
report is filed there is no public market for
the common stock of the issuer, so the
aggregate market value of such stock is $0.
As of December 31, 1998, the Registrant had
outstanding 380,000 shares of Common Stock, par
value $0.001. At September 30, 1999, the
Registrant had outstanding 9,680,000 shares of
Common Stock, par value $0.001.
Documents incorporated by reference: None.
TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
Part I
1. Description of Business 3
2. Description of Properties 7
3. Legal Proceedings 7
4. Submission of Matters to a Vote of Security Holders 7
Part II
5. Market for Common Equity and Related Stockholder Matters 7
6. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
7. Financial Statements 8
8. Changes in and Disagreements with Accountants 8
on Accounting and Financial Disclosure
Part III
9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act 9
10. Executive Compensation 10
11. Security Ownership of Certain Beneficial
Owners and Management 10
12. Certain Relationships and Related Transactions 12
13. Exhibits and Reports on Form 8-K 13
2
FORWARD-LOOKING STATEMENT NOTICE
When used in this report, the words "may,"
"will," "expect," "anticipate," "continue,"
"estimate," "project," "intend," and similar
expressions are intended to identify forward-
looking statements within the meaning of Section 27a
of the Securities Act of 1933 and Section 21e of
the Securities Exchange Act of 1934 regarding
events, conditions, and financial trends that may
affect the Company's future plans of
operations, business strategy, operating results,
and financial position. Persons reviewing this
report are cautioned that any forward-looking
statements are not guarantees of future
performance and are subject to risks and
uncertainties and that actual results may differ
materially from those included within the forward-
looking statements as a result of various factors.
Such factors are discussed under the headings
"Item 1. Description of Business," and "Item 6.
Management's Discussion and Analysis of Financial
Condition and Results of Operations," and also
include general economic factors and conditions
that may directly or indirectly
impact the Company's financial condition or
results of
operations.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
For the past three years the Company has had no
active business operations, and has been seeking to
acquire an interest in a business with long-term
growth potential. The Company was originally
formed as a Utah corporation in February 1986. It
has been an inactive shell corporation for at
least the past 10 years. In January 1999, the
stockholders approved a change in domicile of the
Company from Utah to Nevada, and in connection
therewith a change in the Company's name to
Prestige Capital Corporation.
The Company currently has no commitment or
arrangement to participate in a business and cannot
now predict what type of business it may enter
into or acquire. It is emphasized that the business
objectives discussed herein are extremely general
and are not intended to be restrictive on the
discretion of the Company's management.
In September of 1999 the Company converted its notes
payable in the principal amount of $46,000, and
accrued interest to common stock at the rate of
$0.0076 per share, or a total of 9,300,000 shares.
The holders of the notes were Sonos Management
Corporation and Glen Ulmer, an officer and director.
Selection of a Business
The Company anticipates that businesses for possible
acquisition will be referred by various sources,
including its officers and directors, professional
advisors, securities broker-dealers, venture
capitalists, members of the financial community,
and others who may present unsolicited proposals.
The Company will not engage in any general
solicitation or advertising for a business
opportunity, and will rely on personal contacts of
its officers and directors and their affiliates, as
well as indirect associations between them and
other business and professional people. By
relying on "word of mouth", the Company may be
limited in the number of potential acquisitions it
can identify. While it is not presently
anticipated that the Company will engage
unaffiliated professional firms specializing in
business acquisitions or reorganizations, such firms
may be retained if management deems it in the best
interest of the Company.
3
Compensation to a finder or business acquisition
firm may take various forms, including one-time
cash payments, payments based on a percentage of
revenues or product sales volume, payments involving
issuance of securities (including those of the
Company), or any combination of these or other
compensation arrangements. Consequently, the Company
is currently unable to predict the cost of
utilizing such services.
The Company will not restrict its search to any
particular business, industry, or geographical
location, and management reserves the right to
evaluate and enter into any type of business in
any location. The Company may participate in a newly
organized business venture or a more established
company entering a new phase of growth or in
need of additional capital to overcome existing
financial problems. Participation in a new
business venture entails greater risks since in
many instances management of such a venture will
not have proved its ability, the eventual market
of such venture's product or services will likely
not be established, and the profitability of the
venture will be unproved and cannot be predicted
accurately. If the Company participates in a more
established firm with existing financial
problems, it may be subjected to risk because
the financial resources of the Company may not
be adequate to eliminate or reverse the
circumstances leading to such financial problems.
In seeking a business venture, the decision of
management will not be controlled by an attempt
to take advantage of any anticipated or perceived
appeal of a specific industry, management group,
product, or industry, but will be based on the
business objective of seeking long-term capital
appreciation in the real value of the Company.
The analysis of new businesses will be undertaken by
or under the supervision of the officers and
directors. In analyzing prospective businesses,
management will consider, to the extent applicable,
the available technical, financial, and managerial
resources; working capital and other 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,
or trade or service marks; name identification; and
other relevant factors.
The decision to participate in a specific business
may be based on 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 other factors which
are difficult, if not impossible, to analyze
through any objective criteria. 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, and other factors.
The Company will analyze all available factors
and make a determination based on a composite of
available facts, without reliance on any single
factor. The period within which the Company may
participate in a business cannot be predicted and
will depend on circumstances beyond the
Company's control, including the availability of
businesses, the time required for the Company to
complete its investigation and analysis of
prospective businesses, the time required to prepare
appropriate documents and agreements providing for
the Company's participation, and other circumstances.
4
Acquisition of a Business
In implementing a structure for a particular business
acquisition, the Company may become a party to
a merger, consolidation, or other reorganization
with another corporation or entity; joint venture;
license; purchase and sale of assets; or purchase
and sale of stock, the exact nature of which cannot
now be predicted. Notwithstanding the above, the
Company does not intend to participate in a
business through the purchase of minority stock
positions. On the consummation of a transaction, it
is likely that the present management and
shareholders of the Company will not be in control
of the Company. In addition, a majority or all of
the Company's directors may, as part of the
terms of the acquisition transaction, resign and be
replaced by new directors without a vote of the
Company's shareholders.
In connection with the Company's acquisition of a
business, the present shareholders of the
Company, including officers and directors, may, as
a negotiated element of the acquisition, sell a
portion or all of the Company's Common Stock held by
them at a significant premium over their original
investment in the Company. It is not unusual
for affiliates of the entity participating in
the reorganization to negotiate to purchase shares
held by the present shareholders in order to reduce
the number of "restricted securities" held by
persons no longer affiliated with the Company
and thereby reduce the potential adverse impact on
the public market in the Company's Common Stock that
could result from substantial sales of such shares
after the restrictions no longer apply. As a
result of such sales, affiliates of the
entity participating in the business
reorganization with the Company would acquire a
higher percentage of equity ownership in the
Company. Public investors will not receive any
portion of the premium that may be paid in the
foregoing circumstances. Furthermore, the Company's
shareholders may not be afforded an opportunity to
approve or consent to any particular stock buy-out
transaction.
In the event sales of shares by present
shareholders of the Company, including officers
and directors, is a negotiated element of a
future acquisition, a conflict of interest may arise
because directors will be negotiating for the
acquisition on behalf of the Company and for sale of
their shares for their own respective accounts.
Where a business opportunity is well suited for
acquisition by the Company, but affiliates of the
business opportunity impose a condition that
management sell their shares at a price which is
unacceptable to them, management may not sacrifice
their financial interest for the Company to
complete the transaction. Where the business
opportunity is not well suited, but the price
offered management for their shares is high,
management will be tempted to effect the
acquisition to realize a substantial gain on
their shares in the Company. Management has not
adopted any policy for resolving the foregoing
potential conflicts, should they arise, and does not
intend to obtain an independent appraisal to
determine whether any price that may be offered for
their shares is fair. Stockholders must rely,
instead, on the obligation of management to fulfill
its fiduciary duty under state law to act in the
best interests of the Company and its stockholders.
It is anticipated that any securities issued
in any such reorganization would be issued in
reliance on exemptions from registration under
applicable federal and state securities laws. In
some circumstances, however, as a negotiated element
of the transaction, the Company may agree to
register such securities either at the time the
transaction is consummated, under certain conditions,
or at specified times thereafter. Although the terms
of such registration rights and the number of
securities, if any, which may be registered cannot
be predicted, it may be expected that registration
of securities by the Company in these circumstances
would entail substantial expense to the Company.
The issuance of substantial additional securities
and their potential sale into any trading market
that may develop in the Company's securities may
have a depressive effect on such market.
5
While the actual terms of a transaction to which the
Company may be a party cannot be predicted, it
may be expected that the parties to the business
transaction will find it desirable to structure
the acquisition as a so-called "tax-free" event
under sections 351 or 368(a) of the Internal Revenue
Code of 1986, (the "Code"). In order to obtain tax-
free treatment under section 351 of the Code, it
would be necessary for the owners of the acquired
business to own 80% or more of the voting stock of
the surviving entity. In such event, the
shareholders of the Company would retain less than
20% of the issued and outstanding shares of the
surviving entity. Section 368(a)(1) of the Code
provides for tax-free treatment of certain
business reorganizations between corporate
entities where one corporation is merged with
or acquires the securities or assets of
another corporation. Generally, the Company will be
the acquiring corporation in such a business
reorganization, and the tax-free status of the
transaction will not depend on the issuance of
any specific amount of the Company's voting
securities. It is not uncommon, however, that as a
negotiated element of a transaction completed in
reliance on section 368, the acquiring
corporation issue securities in such an amount
that the shareholders of the acquired corporation
will hold 50% or more of the voting stock of the
surviving entity. Consequently, there is a
substantial possibility that the shareholders of
the Company immediately prior to the transaction
would retain less than 50% of the issued and
outstanding shares of the surviving entity.
Therefore, regardless of the form of the business
acquisition, it may be anticipated that
stockholders immediately prior to the
transaction will experience a significant
reduction in their percentage of ownership in the
Company.
Notwithstanding the fact that the Company is
technically the acquiring entity in the foregoing
circumstances, generally accepted accounting
principles will ordinarily require that such
transaction be accounted for as if the Company had
been acquired by the other entity owning the
business and, therefore, will not permit a write-up
in the carrying value of the assets of the other
company.
The manner in which the Company participates in a
business will depend on the nature of the
business, the respective needs and desires of the
Company and other parties, the management of the
business, and the relative negotiating strength of
the Company and such other management.
The Company will participate in a business only
after the negotiation and execution of
appropriate written agreements. Although the
terms of such agreements cannot be predicted,
generally such agreements will require specific
representations and warranties by all of the
parties thereto, will specify certain events of
default, will detail the terms of closing and the
conditions which must be satisfied by each of the
parties prior to such closing, will outline the
manner of bearing costs if the transaction is not
closed, will set forth remedies on default, and
will include miscellaneous other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of
a business will be dependent on the nature of the
business and the interest acquired. The Company is
unable to predict whether the Company will be in
control of the business or whether present management
will be in control of the Company following the
acquisition. It may be expected that the business
will present various risks, which cannot be
predicted at the present time.
Governmental Regulation
It is impossible to predict the government
regulation, if any, to which the Company may be
subject until it has acquired an interest in a
business. The use of assets and/or conduct of
businesses that the Company may acquire could
subject it to environmental, public health and
safety, land use, trade, or other governmental
regulations and state or local taxation. In
selecting a business in which to acquire an
6
interest, management will endeavor to ascertain,
to the extent of the limited resources of the
Company, the effects of such government
regulation on the prospective business of the
Company. In certain circumstances, however, such as
the acquisition of an interest in a new or start-
up business activity, it may not be possible to
predict with any degree of accuracy the impact of
government regulation. The inability to ascertain
the effect of government regulation on a
prospective business activity will make the
acquisition of an interest in such business a
higher risk.
Competition
The Company will be involved in intense competition
with other business entities, many of which will
have a competitive edge over the Company by virtue
of their stronger financial resources and prior
experience in business. There is no assurance that
the Company will be successful in obtaining suitable
investments.
Employees
The Company is a development stage company and
currently has no employees. Executive officers, who
are not compensated for their time contributed to
the Company, will devote only such time to the
affairs of the Company as they deem appropriate,
which is estimated to be approximately 20 hours
per month per person. Management of the Company
expects to use consultants, attorneys, and
accountants as necessary, and does not anticipate a
need to engage any full-time employees so long as
it is seeking and evaluating businesses. The
need for employees and their availability will
be addressed in connection with a decision whether
or not to acquire or participate in a specific
business industry.
ITEM 2. DESCRIPTION OF PROPERTIES
The Company utilizes office space at 311 South
State, Suite 400, Salt Lake City, Utah 84111,
provided by Lynn Dixon, a principal shareholder. The
Company does not pay rent for this office space.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings,
and to the best of its knowledge, no such
proceedings by or against the Company have been
threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders
in the fourth quarter of 1998.
PART III
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There has been no public trading market for the
Company's common stock for at least the past ten
years. Following the filing of this report, the
Company will seek out one or more stock
brokerage firms to make a market in the Company's
common stock and submit an application for
quotation of the Company's common stock on the
OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc., or the
"Pink Sheets" operated by the National Quotation
Bureau. There is no assurance that a trading market
in the common stock will be established in the
future.
7
Since its inception, no dividends have been paid on
the Company's common stock. The Company intends to
retain any earnings for use in its business
activities, so it is not expected that any
dividends on the common stock will be declared and
paid in the foreseeable future.
On September 30, 1999, there were approximately 78
holders of record of the Company's Common Stock.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Years Ended December 31, 1998 and 1997
The Company had no revenue during the last two
years. The Company had no general and
administrative expenses in 1997, but did incur
$9,355 of such expenses in 1998. General and
administrative expenses during 1998, consisted
of fees and related expenses associated with
reviving the Company. In 1997 and 1998 the
Company recognized interest expense of $2,000 in
each year, which represents interest on two
obligations, (1) in the principal amount of
$26,000 owed to Sonos Management Corporation, and
(2) in the principal amount of $20,000 owed to Glen
Ulmer. The Company realized a net loss of $11,355 in
1998 and a loss of $2,000 in 1997. The Company
does not expect to generate any revenue unless and
until it acquires an interest in an operating
company.
Liquidity and Capital Resources
At December 31, 1998, the Company had a working
capital deficit of $28,186. This deficit is
largely attributable to debt and interest
obligations owed to affiliates of the Company, who
have not pressed the Company for payment in hopes
the Company will locate a business venture in which
to participate that will serve as a resource for
payment of the obligations. The Company's current
plan is to handle the administrative and
reporting requirements of a public company; and
search for potential businesses, products,
technologies and companies for acquisition. At
present, the Company has no understandings,
commitments or agreements with respect to the
acquisition of any business, product, technology
or company and there can be no assurance that the
Company will identify any such business, product,
technology or company suitable for acquisition in
the future. Further, there can be no assurance
that the Company would be successful in consummating
any acquisition on favorable terms or that it will
be able to profitably manage the business, product,
technology or company it acquires. The Company's
ability to pursue its plan is dependent on the
continued forbearance of its affiliated
creditors and their willingness to advance
additional funds to the Company as needed.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company appear at the
end of this report beginning with the Index to
Financial Statements on page F-1.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with
accountants in the past three years.
8
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and Officers
The following table sets forth the names, ages,
and positions with the Company for each of the
directors and officers of the Company.
Name Age Positions Since
Glen R. Ulmer 55 President and Director 1999
Paul W. Nielsen 78 Vice President and Director 1989
George P. Horton 66 Secretary/ Treasurer and Director 1989
All directors hold office until the next annual
meeting of stockholders and until their successors
are elected and qualify. Officers serve at the
discretion of the Board of Directors.
The following is information on the business
experience of each director and officer.
Glen R. Ulmer is a graduate of Utah Technological
College in cosmetology and the Utah College of
Massage Therapy, and is nationally certified as a
Sports Massage Therapist. Mr. Ulmer has been self-
employed since 1977. Mr. Ulmer has been a director of
several public companies.
Paul W. Nielsen has been retired since 1984. Mr.
Nielsen is currently serving as an officer of
Prestige Capital Corporation and Fashion Tech
International, Inc.
George R. Horton is a graduate of Brigham Young
University in animal husbandry and the
University of Utah in secondary education.
Currently, Mr. Horton is serving as the chief
executive officer of Sonos Management Corporation and
MG Inc. and the secretary and treasurer of Fashion
Tech International, Inc. and Prestige Capital
Corporation, all of which are public companies.
Other Shell Company Activities
Mr. Ulmer, Mr. Nielsen and Mr. Horton are currently
officers and directors of Fashion Tech International,
Inc. Mr. Ulmer and Mr. Horton are officers and
directors of MG Inc. In addition, Mr. Ulmer has
been an officer and director of Inland Pacific
Resources, Inc., Business Valet Services, Inc.,
First Growth Investors, Inc., Digital Home
Theater Systems, Inc., Info Investors, Inc. and
Foreplay Golf and Travel, Inc. All of the
aforementioned companies are non-reporting publicly
held shell corporations seeking a business
acquisition. The possibility exists that one or
more of the officers and directors of the Company
could become officers and/or directors of other
shell companies in the future, although they have no
intention of doing so at the present time.
Certain conflicts of interest are inherent in
the participation of the Company's officers and
directors as management in other shell companies,
which may be difficult, if not impossible, to
resolve in all cases in the best interests of the
Company. Failure by
9
management to conduct the Company's business in its
best interests may result in liability of management
of the Company to the shareholders.
ITEM 10. EXECUTIVE COMPENSATION
The Company has no agreement or understanding,
express or implied, with any officer, director, or
principal stockholder, or their affiliates or
associates, regarding employment with the Company
or compensation for services. There is no
understanding between the Company and any of its
present stockholders regarding the sale of a portion
or all of the common stock currently held by them
in connection with any future participation by
the Company in a business. There are no other plans,
understandings, or arrangements whereby any of the
Company's officers, directors, or principal
stockholders, or any of their affiliates or
associates, would receive funds, stock, or other
assets in connection with the Company's
participation in a business. No advances have been
made or contemplated by the Company to any of its
officers, directors, or principal stockholders, or
any of their affiliates or associates.
There is no policy that prevents management from
adopting a plan or agreement in the future that
would provide for cash or stock based compensation
for services rendered to the Company.
On acquisition of a business, it is possible
that current management will resign and be replaced
by persons associated with the business acquired,
particularly if the Company participates in a
business by effecting a stock exchange, merger,
or consolidation. In the event that any member of
current management remains after effecting a
business acquisition, that member's time commitment
and compensation will likely be adjusted based on
the nature and location of such business and
the services required, which cannot now be foreseen.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of October 1,
1999, the number and percentage of the outstanding
shares of common stock which, according to the
information supplied to the Company, were
beneficially owned by (i) each person who is
currently a director of the Company, (ii) each
executive officer, (iii) all current directors and
executive officers of the Company as a group and
(iv) each person who, to the knowledge of the
Company, is the beneficial owner of more than 5% of
the outstanding common stock. Except as otherwise
indicated, the persons named in the table have sole
voting and dispositive power with respect to all
shares beneficially owned, subject to community
property laws where applicable.
Common Percent
Shares of Class
Principal Stockholders
Lynn Dixon 930,600 9.6
311 S. State Street, Suite 465
Salt Lake City, UT 84111
Sonos Management Corporation (1) 668,900 6.9
1340 East 1300 North
Springville, UT 84663
Melissa Epperson 834,600 8.6
34 North Fox Hill Road
North Salt Lake, UT 84054
Pam Jowett 834,600 8.6
2508 South 1300 East
Salt Lake City, UT
84106
Trinity American Corporation 834,600 8.6
800 Kings Hwy. North, Suite 900
Cherry Hill, NJ 08034
D. Greg Steinicke 907,620 9.4
5616 South 2775 West
Salt Lake City, UT 84118
James Purser 907,620 9.4
3353 South 1300 East
Salt Lake City, UT 84106
L Mark Pratt 907,620 9.4
485 West 4800 South
Salt Lake City, UT 84123
Clair Olson 907,620 9.4
768 Gull Avenue
Foster City, CA 94404
Jason F. Williams 907,620 9.4
544 South 50 West
Farmington, UT 84025
Robsal, Inc. 834,600 8.6
2472 Broadway, Suite 137
New York, NY 10025
11
Officers and Directors
Glen R. Ulmer -0- -0-
Paul W. Nielsen 15,000 0.15
George R. Horton (1) 678,900 7.0
All officers and directors as 7.15
A group (3 persons)
(1) Mr. Horton is the President and sole
director of Sonos Management Corporation, but is
not a stockholder. Accordingly, Mr. Horton may
be deemed to have shared voting and investment
control of such shares.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Glen R. Ulmer, an officer and director of the Company
made a loan to the Company in 1999 in the amount of
$20,000. The loan bears interest at the rate of
eight percent per annum and is payable on demand.
Additional loans were made to the Company in 1989
and 1998 by Sonos Management Corporation in the
amount of $26,000, which are payable on demand and
bear interest at the rate of eight percent per
annum. The proceeds of the loans were and will be
used to revive the Company and cover the costs
associated with bringing its reporting obligations
under the Securities Exchange Act of 1934 current.
In September 1999 Sonos Management Corporation and
Glen Ulmer converted the principal amount of
their notes and accrued interest to common stock
at a conversion rate of $0.0076 per share, or a
total of 9,300,000. As a result of the transactions,
these parties acquired approximately 96.2% of the
issued and outstanding common stock of the Company.
Subsequent to the note conversions, Sonos Management
Corporation and Glen Ulmer sold a portion of the
shares received in privately negotiated transactions
to 10 persons, who are listed under "Item 11.
Security Ownership of Certain Beneficial Owners and
Management."
12
ITEM 13.
EXHIBITS AND REPORTS ON FORM 8-K
Copies of the following documents are included
as exhibits to this report pursuant to Item 601 of
Regulation S-B.
Exhibits.
Exhibit SEC Ref. Title of Document Location*
No. No.
1 (3)(i) Articles of Incorporation E-1
2 (3)(ii) By-Laws E-5
3 (2) Articles of Merger E-13
4 (10) Promissory Note/ Sonos (formerly
Southwick, Inc.) E-15
5 (10) Promissory Note/ Sonos Management Corp. E-16
6 (10) Promissory Note/ Ulmer E-17
7 (27) Financial Data Schedules *
* The Financial Data Schedule is presented only in the electronic
filing with the Securities and Exchange Commission.
FORM 8-K FILINGS
No reports on Form 8-K were filed in the last calendar quarter of 1998.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRESTIGE CAPITAL CORPORATION
Date: November 16, 1999 By: /s/ Glen R. Ulmer, President
13
In accordance with the Exchange Act, this report has been
signed by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Dated: November 16, 1999 /s/ Glen R. Ulmer, Director
Dated: November 16, 1999 /s/ Paul W. Nielsen, Director
Dated: November 16, 1999 /s/ George R. Horton, Director
14
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Financial Statements
December 31, 1998 and 1997
CONTENTS
Independent Auditors' Report F-2
Balance Sheet F-3
Statements of Operations F-4
Statements of Stockholders' Equity F-5
Statements of Cash Flows F-8
Notes to the Financial Statements F-11
F-1
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Prestige Capital Corporation
Salt Lake City, Utah
We have audited the accompanying balance sheets
of Prestige Capital Corporation (a development
stage company) as of December 31, 1998 and
1997, and the related statements of operations,
stockholders' equity (deficit) and cash flows for
the years ended December 31, 1998, 1997 and 1996
and from the beginning of the development stage on
January 1, 1988 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
Prestige Capital Corporation (a development stage
company) as of December 31, 1998 and 1997, and the
results of its operations and its cash flows
for the years ended December 31, 1998, 1997
and 1996 and from the beginning of the
development stage on January 1, 1988 through
December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have
been prepared assuming that the Company will
continue as a going concern. As discussed in
Note 3 to the financial statements, the Company
is a development stage company with no
significant operating results to date, which
raises substantial doubt about its ability
to continue as a going concern.
Management's plans with regard to these matters
are also described in the Note 3. The
financial statements do not include any
adjustments that might result from the outcome of
this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
January 10, 1999
F-2
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Balance Sheets
ASSETS
December 31,
1998 1997
CURRENT ASSETS
Cash $ 100 $ -
Total Current Assets 100 -
TOTAL ASSETS $ 100 $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accrued interest $ 18,931 $16,931
Accounts payable 8,355 -
Notes payable - related party (Note 2) 1,000 -
Total Current Liabilities 28,286 16,931
LONG-TERM LIABILITIES
Note payable - related party (Note 2) 25,000 25,000
Total Long-Term Liabilities 25,000 25,000
Total Liabilities 53,286 41,931
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock authorized: 50,000,000 common
Shares at $0.001 par value; 380,000 and
370,000 shares issued and outstanding,
respectively 380 370
Capital in excess of par value 268,587 268,497
Deficit accumulated during the
development stage (322,153) (310,798)
Total Stockholders' Equity (Deficit) ( 53,186) ( 41,931)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 100 $ -
The accompanying notes are an integral part of these financial statements.
F-3
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Statements of Operations
From
Inception on
For the February 7,
Years Ended 1986 Through
December 31, December 31,
1998 1997 1996 1998
REVENUES $ - $ - $ - $ -
EXPENSES
General and administrative 9,355 - - 53,222
Interest expense 2,000 2,000 2,000 18,931
Total Expenses 11,355 2,000 2,000 72,153
DISPOSAL OF ASSETS - - - 250,000
NET LOSS $(11,355) $ (2,000) $ (2,000) $(322,153)
BASIC LOSS PER SHARE $ (0.03) $ (0.00) $ (0.00)
WEIGHTED AVERAGE
NUMBER OF SHARES 370,000 370,000 370,000
The accompanying notes are an integral part of these financial statements.
F-4
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
[Download Table]
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance from inception on
February 7, 1986 - $ - $ - $ -
February 7, 1986, common stock
issued to officers at $0.001 per
share for cash 1,500,000 1,500 3,500 -
March 16, 1987, common stock
issued to public at $0.50 per
share for cash 150,000 150 249,850 -
Issuance costs - - (46,133) -
Reduction of insider shares (1,400,000) (1,400) 1,400 -
July 21, 1989, common stock
issued to shareholder at $0.001
per share for film recorded at
predecessor cost 120,000 120 - -
Net loss for the period from
inception on February 7, 1986
through December 31, 1995 - - - (306,798)
Balance, December 31, 1995 370,000 370 268,497 (306,798)
Net loss for the year ended
December 31, 1996 - - - (2,000)
Balance, December 31, 1996 370,000 370 268,497 (308,798)
Net loss for the year ended
December 31, 1997 - - - (2,000)
Balance, December 31, 1997 370,000 $ 370 $ 268,497 $ (310,798)
The accompanying notes are an integral part of these financial statements.
F-5
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
[Enlarge/Download Table]
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
Shares Amount Par Value Stage
Balance, December 31, 1997 370,000 $ 370 $ 268,497 $ (310,798)
December 31, 1998, common
stock issued to a shareholder
at $0.01 par value for cash 10,000 10 90 -
Net loss for the year ended
December 31, 1998 - - - (11,355)
Balance, December 31, 1998 380,000 $ 380 $ 268,587 $ (322,153)
The accompanying notes are an integral part of these financial statements.
F-6
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Statements of Cash Flows
[Enlarge/Download Table]
From
Inception on
For the February 7,
Years Ended 1986 Through
December 31, December 31,
1998 1997 1996 1998
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (11,355) $ (2,000) $ (2,000) $ (322,153)
Adjustments to reconcile net loss to net
cash provided (used) by operating activities:
Loss from disposal of assets - - - 250,000
Changes in operating assets and liability
accounts:
Increase (decrease) in accounts payable 8,355 - - 8,355
Increase (decrease) in accrued interest 2,000 2,000 2,000 18,931
(Increase) in inventory - - - (165,000)
Net Cash (Used) by Operating Activities (1,000) - - (209,867)
CASH FLOWS FROM INVESTING ACTIVITIES - - - -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party 1,000 - - 1,000
Issuance of common stock for cash 100 - - 208,967
Net Cash Provided by Financing
Activities 1,100 - - 209,967
NET INCREASE (DECREASE) IN CASH 100 - - 100
CASH AT BEGINNING OF PERIOD - - - -
CASH AT END OF PERIOD $ 100 $ - $ - $ 100
CASH PAYMENTS FOR:
Income taxes $ - $ - $ - $ -
Interest $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Issuance of stock for inventory $ - $ - $ - $ 60,000
Issuance of note payable for inventory $ - $ - $ - $ 25,000
The accompanying notes are an integral part of these financial statements.
F-7
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Prestige Capital Corporation (the Company) was
originally incorporated on February 7, 1986, as a Utah
Corporation under the name of Hood Ventures, Inc.
On December 31, 1998, the name was changed to
Prestige Capital Corporation. On December 31, 1998,
Hood Ventures, Inc. of Utah merged with Prestige
Capital Corporation, a Nevada corporation, leaving
the Nevada corporation as the surviving company.
Currently the Company is seeking new business
opportunities believed to hold a potential profit
or to merge with an existing company and is
classified as a development stage company.
b. Accounting Method
The Company's financial statements are prepared
using the accrual method of accounting. The
Company has adopted a December 31 year end.
c. Basic Loss Per Share
The computations of basic loss per share of common
stock are based on the weighted average number of
shares issued and outstanding at the date of the
financial statements.
d. Use of Estimates
The preparation of financial statements in conformity
withgenerally 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 statement and the reported amounts
of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
e. Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when
purchased to be cash equivalents.
f. Provision for Taxes
At December 31, 1998, the Company had net
operating loss carryforwards of approximately
$310,000 that may be offset against future taxable
income through 2013. No tax benefit has been
reported in the financial statements, because the
potential tax benefits of the net
operating loss carryforwards are offset by a
valuation allowance of the same amount.
F-8
PRESTIGE CAPITAL CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1998 and 1997
NOTE 2 - RELATED PARTY TRANSACTIONS
On July 21, 1989, 120,000 shares of common stock were
issued to officers and directors of the Company for
the purchase of a film.
The Company has notes payable to an officer totaling
$26,000 at December 31, 1998. The notes are
unsecured and due upon demand. Interest in imputed
on the note at 8% per annum.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared
using 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 does not have significant
cash or other material assets, nor does it
have an established source of revenues
sufficient to cover its operating costs and to
allow it to continue as a going concern. It is
the intent of the Company to seek a merger with an
existing, operating company. In the interim,
shareholders of the Company have committed to
meeting its minimal operating expenses.
NOTE 4 - REVERSE STOCK SPLIT
On May 12, 1987, the Board of Directors of the
Company approved a 150-for-1 forward stock split and
on December 15, 1998, the Board of Directors of the
Company approved a 1-for-500 reverse stock split
while retaining the authorized shares at 50,000,000
and retaining the par value at $0.001. This change
has been applied to the financial statements on a
retroactive basis back to inception of the Company.
F-9
Dates Referenced Herein and Documents Incorporated by Reference
4 Subsequent Filings that Reference this Filing
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