FORM 10-K FOR 9/30/06
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended September 30, 2006 Commission file Number 0-7376
Hynes & Howes Insurance Counselors, Inc.
(Exact name of registrant as specified in its' charter)
Iowa 42-0948341
(State or other jurisdiction I.R.S. Employer Identification No.
of incorporation or organization)
2920 Harrison St., Davenport, Iowa 52803
(Address of principal (Zip Code)
executive office)
Registrant's telephone number, including area code (563) 326-6401
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
None None-filing pursuant to Section 12 (g)
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, No Par Value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all annual,
quarterly and other reports required to be filed with the Commission and (2) has
been subject to the filing requirements for at least the past ninety (90) days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
11,222,699
Item 1. Business
(a) Hynes & Howes Insurance Counselors, Inc. (hereafter the "Registrant")
was an independent insurance agency handling principally all types of
casualty, fire and surety insurance. Registrant was organized as a
corporation under the laws of the State of Iowa on June 28, 1969, as
Hynes & Howes Insurance Company. Because it became apparent this name
created confusion as to the business of Registrant, an amendment to the
Articles of the Incorporation was filed on November 17, 1970, with the
Secretary of the State of Iowa changing the name to Hynes & Howes
Insurance Counselors, Inc. This action was ratified by the
stockholders at a meeting February 5, 1971.
At the annual stockholders meetings for 1973, 1974, 1975, 1976, 1977,
1978, and 1979, a proposal was made to amend the Articles of
Incorporation to change the name of the registrant from Hynes & Howes
Insurance Counselors, Inc., to the United Insurance Counselors
Corporation. The Iowa Business Corporation Act requires an affirmative
vote of the majority of the outstanding shares of the corporation to
effectuate such amendment. Although a quorum was present at each of
these annual meetings, fifty per cent (50%) required to change the
Articles of Incorporation were not represented, and the proposal could
not be acted upon.
(b) The general insurance agency and brokerage business was highly
competitive. Registrant competed locally and regionally with many
direct-line writers of fire, casualty and surety insurance who were
much larger than Registrant in all respects including premium volume,
capital and personnel employed. Registrant was also in competition
with thousands of independent insurance agencies, some of whom had
higher premium volume and more employees than Registrant. Registrant
was not a significant factor in the total volume of general insurance
business.
Registrant has sold Davenport agency to Ralph Parry Insurance Agency
Ltd. in January 1981.
(At the present time, the Registrant does not have any plans to acquire
any insurance agencies.)
At fiscal year end, Registrant, in its business has no employees. The
Trustee of the Frank B. Howes Trust which holds 36.5% of the
outstanding common stock, Janice Howes died in July 1983, and John
Howes became Trustee of the Frank B. Howes Trust.
During the fiscal year ending September 30, 1980, the Viking Agency and
the Hansen and Hansen, Inc. general insurance agencies, were sold on
contract to R.A.P. Enterprises, Inc., Ralph A. Parry, former president
of Registrant and the former manager of the Davenport agency owned by
Registrant is the owner of R.A.P. Enterprises, Inc.
During the fiscal year ending September 30, 1981, the Davenport
agencies were sold to Ralph A. Parry Insurance Agency, Ltd., as of
January 1, 1981. Also owned by Ralph A. Parry.
The intention at this time is to continue to loan on and invest in real
estate properties and equities.
(c) Line of Business
The Registrant has not engaged in more than one line of business which
meets the requisites of item 1 (c) (A), (B) or (C) for business with
sales and revenues which do not exceed $50,000.00.
Registrant and its subsidiaries are not engaged in material operations
in foreign countries, nor does Registrant or its subsidiaries have a
material portion of sales or revenues derived from customers in foreign
countries.
ITEM 2. MANAGEMENT DISCUSSION FOR 9/30/06
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE STATEMENT OF OPERATIONS
Liquidity
Registrant receives approximately $5,650 of cash each month from
payments of principal and interest on Real Estate Contracts Receivable.
Registrant has very little liquidity because most of these payments are used to
pay management fees and other operating expenses.
Capital Resources
The principal assets of the registrant at September 30, 2006 are
fourteen real estate contracts receivable.
Results of Operations
The loss from operations for the year ended September 30, 2006
decreased $45,746 compared to the year ended September 30, 2005.
Total revenue increased $35,410. This was primarily due to a
change in method of accounting for income recognition on installment contracts.
On October 1, 2005, the Company elected to adopt the provisions of FAS #66.
This change deferred $27,587 of income from the year ended September 30, 2005,
to future years. All but $8,127 of that deferral was recognized in the year
ended September 30, 2006.
Operating expenses decreased $10,336. The decrease resulted from the
following:
The Company utilizes the employees of a related entity. For
the fiscal year ended September 30, 2006, the Company paid the related
entity $17,623 for it's prorata share of wages and payroll tax costs. For the
year ended September 30, 2005, those payments were $23,148.
Other operating expenses decreased $4,811.
Item 3. Properties
The Registrant has its offices at 2920 Harrison Street, Davenport,
Iowa. The Company rents approximately 700 square feet of space with
furnishings at a monthly rate of $1,350 dollars.
Registrant feels this office space is of adequate size and capacity to
handle the business of Registrant and its anticipated growth for
foreseeable future needs.
Item 4. Parents and Subsidiaries of the Registrant
The Frank B. Howes Trust, which holds 36.5 per cent of the Registrant's
outstanding common stock, is the parent of the Registrant. This
percentage includes 3,000,000 shares which is held in escrow by the
Insurance Department of Iowa. The escrow arrangement was required by
the Commissioner of Insurance of the State of Iowa in order to gain
approval of Registrant's new stock issue of April 1971. Under the
terms of this arrangement, those shares could not be sold for a period
of five (5) years or until Registrant attained certain profitable
operating goals for three (3) consecutive years. The escrow
arrangement also required that should Registrant dissolve during this
period, the shares held in escrow will not participate in the assets of
Registrant legally available for distribution until after there has
been paid or irrevocable set aside for all other shares an amount equal
to the other shares at the per offering price of $1.25, adjusted for
stock splits and stock dividends. As of April 6, 1976, five (5) years
elapsed.
The Insurance Department of Iowa, Securities Division has indicated
that under the terms of the Escrow Agreement the approval of the
Commissioner of Insurance was required. The Insurance Department,
reviewing the condition of the Registrant, did conclude that the
requisite approval of the Commissioner would not be forthcoming at that
time, and furthermore, that the Insurance Department will act as escrow
agent for the shares of the Frank B. Howes Trust.
Item 5. Legal Proceedings
None
Item 6. Increases and Decreases in Outstanding Securities and Indebtedness
(a) In the fiscal year, Registrant has not issued any new shares or
otherwise created additional outstanding securities; neither has it
reduced outstanding securities by purchase or acquisition of treasury
shares. Therefore, there were 11,222,600 shares of Registrant's stock
outstanding on September 30, 2006.
(b) None
(c) None
Item 7. Changes in Securities and Changes in Security for Registered Securities
None
Item 8. Defaults upon Senior Securities
None
Item 9. Approximate Number of Equity Security Holders
The approximate number of holders of each class of equity securities of
Registrant, as of September 30, 2006, is indicated in the following
table:
(2) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Common Stock, Approximately 4,774
no par value
Item 10. Submission of Matters to a Vote of Security Holders
On February 3, 1986, Harold L. Luebken was elected a member of the
Board of Directors and to the office of President.
On July 12, 1983, Dan B. Davis was elected to the Board of Directors.
Item 11. Executive Officers of the Registrant
(a) The following table indicates, as of September 30, 2006, the names and
ages of the executive officers of Registrant. Their term of office
with Registrant held by such person:
Position and
Office with Held Office Term of
Name Age Registrant Since Office
Joseph Coon 46 President June 2006 Next Annual
Shareholders'
Meeting
Monica Wilcher 37 Secretary November 2006 Next Annual
Shareholders'
Meeting
There are no family relationships among the executives of the
registrant.
There is no arrangement or understanding between any executive officer
and any other person to which he/she was selected as an officer.
(b) The following is a brief account of the business experiences during
the past five (5) years of each executive officer.
1. Joseph Coon has been a technology coordinator for the past seven
(7) years and an administrator for the past eighteen (18) years.
2. Monica Wilcher has been an accountant and real estate property
manager for the past five (5) years.
Item 12. Indemnification of Directors and Officers
Provisions regarding indemnification of directors and officers of
Registrant, pursuant to Chapter 496A of the Iowa Code of 1973, were
detailed in Item 17 --Indemnification of Directors and Officers, pages
59--63 of Registrant's Form 10 filed with the Securities and Exchange
Commission August 23, 1973.
Item 13. Financial Statements and Exhibits Filed
(a) Financial Statements and audited financial statements are herewith
included.
Exhibits
None
(b) Reports on Form 8-K
1. Registrants filed a Form 8 Amendment to the Form 10-K filed
December, 1991.
2. Registrants filed a Form 8 Amendment to the Form 10-K filed
December, 1993, on April 04, 1993, reporting on February 17, 1994
Brigitta Anderson had resigned from the Board of Directors.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Dated By:
Joseph Coon, President
This corporation has no treasurer.
Dated By:
Monica Wilcher, Secretary
HYNES & HOWES INSURANCE COUNSELORS, INC.
Statistical Data for Form 10k
September 30, 2006
September 30,
2006 2005 2004 2003 2002
1. Net Operating
Revenues $ 71,624 $ 36,214 $ 95,660 $ 69,675 $ 84,103
2. Income (Loss) from
Operations $(26,508) $(72,254) $ (23,285) $ (38,529) $ (13,923)
Per Share Earnings
(Loss) $ ( .00) $ (.00) $ (.00) $ (.00) $ (.00)
3. Working Capital $ 12,672 $ 18,659 $ 48,304 $ 12,852 $ 28,304
4. Total Assets $611,039 $658,939 $ 704,722 $ 728,849 $ 772,058
5. Long Term Obligations
Mortgage Payable $ .00 $ .00 $ .00 $ .00 $ 3,294
6. Cash Dividends per
Common Share $ .00 $ .00 $ .00 $ .00 $ .00
Hynes & Howes Insurance Counselors, Inc.
Davenport, Iowa
Independent Auditor's Report
To The Board of Directors
Hynes & Howes Insurance Counselors
Davenport, Iowa
We have audited the balance sheet of Hynes & Howes Insurance Counselors (an Iowa
corporation) as of September 30, 2006, 2005 and 2004, and the related statements
of income, stockholers' equity, and cash flows for the years then ended.
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 audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 Hynes &
Howes Insurance Counselors, Inc. as of September 30, 2006, 2005, and 2004,
and the results of its operations and its cash flows for the years then
ended in conformity with U.S. generally accepted accounting principles.
Shapley, Shapley & Moorhead, P.C.
Certified Public Accountants
Davenport, Iowa
November 27, 2006
HYNES & HOWES INSURANCE COUNSELORS, INC.
Balance Sheet
September 30, 2006, 2005, and 2004
September 30,
Assets 2006 2005 2004
Current Assets:
Cash in Bank $17,946 $ 44,426 $ 46,294
Other Current Assets (Note 3) 6,059 6,958 8,264
Total Current Assets $24,005 $ 51,384 $ 54,558
Other Assets:
Real Estate Contracts Receivable(Note 4)$581,118 $598,567 $ 637,390
Equipment (Note 5) 5,916 8,933 12,774
Total Other Assets $587,034 $607,555 $ 650,164
Total Assets $611,039 $658,939 $ 704,722
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Balance Sheet
September 30, 2006, 2005 and 2004
September 30,
Liabilities & Stockholders' Equity 2006 2005 2004
Current Liabilities:
Buyers Escrow $ 3,206 $ 5,138 $ 6,254
Deferred Gross Profit 8,127 27,587 00
Total Current Liabilities $11,333 $32,725 $ 6,254
Long Term Liabilities:
Total Liabilities $11,333 $32,725 $ 6,254
Stockholders' Equity:
Capital Stock, no par value, 100,000,000
Shares Authorized, 11,260,675 shares
Issued $3,780,765 $3,780,765 $ 3,780,765
Paid in Capital 100 100 100
Retained Earnings (Deficit) (3,147,907) (3,121,399) (3,049,145)
Treasury Stock, at Cost (33,252) (33,252) (33,252)
Total Stockholders' Equity $ 599,706 $ 626,214 $ 698,468
Total Liabilities & Stockholders'Equity$611,039$ 658,939 $ 704,722
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Statement of Retained Earnings (Deficit)
For the Years Ended September 30, 2006, 2005 and 2004
Year Ended September 30,
2006 2005 2004
Balance at Beginning of Year $ (3,121,399) $ (3,049,145) $ (3,025,860)
Income (Loss) for the Year (26,508) (72,254) (23,285)
Balance at End of Year $ (3,147,907) $ (3,121,399) $ (3,049,145)
Statement of Paid-In Capital
For the Years Ended September 30, 2006, 2005 and 2004
Balance at Beginning
and End of Year $ 100 $ 100 $ 100
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Statement of Operations
For the Years Ended September 30, 2006, 2005 and 2004
Year Ended September 30,
2006 2005 2004
Operating Income:
Interest Income $ 59,682 $ 59,244 $ 74,948
Other Income 11,942 (23,030) 20,712
Total Operating Income 71,624 36,214 $ 95,660
Operating Expenses:
Interest Expense $ 00 $ 00 $ 00
Legal and Audit Fees 10,251 10,242 9,916
Payroll expense (Note 2) 17,623 23,148 23,327
Management Fees (Note 2) 48,000 48,000 48,000
Repairs and Maintenance 1,150 1,103 6,999
Other Operating Expenses 21,108 25,975 30,703
Total Operating Expenses $ 98,132 108,468 $ 118,945
Income From Operations $ (26,508) $ (72,254) $ (23,285)
Income (Loss) Before Income Taxes $ (26,508) $ (72,254) $ (23,285)
Provision for Income Taxes
(Note 10) 0 0 0
Net Income (Loss) $ (26,508) $ (72,254) $ (23,285)
Earnings (Loss) Per Common Share
(Note 6) $ .00 $ .00 $ .00
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Statement of Cash Flow
For the Years Ended September 30, 2006, 2005 and 2004
Increase (Decrease) in Cash and Cash Equivalent
Year Ended September 30,
2006 2005 2004
Cash Flow from Operating Activities:
Interest Received $ 59,682 $ 59,244 $ 74,948
Miscellaneous Income Received 3,480 3,405 3,366
Interest Paid 00 00 ( 00)
Legal, Audit and Management
Fees Paid (58,251) (58,242) (57,916)
Repairs and Maintenance Paid ( 1,150) ( 1,103) ( 6,999)
Cash Paid to Suppliers for
Operating Expenses (35,659) (45,337) (50,843)
Net Cash Provided (Used) by
Operating Activities $ (31,898) $ (42,033) $ (37,444)
Cash Flows from Investing Activities:
Principal Collected on
Real Estate Contracts $ 135,532 $ 341,612 $ 231,701
Buyers Escrow Collected (Paid) (1,932) (1,116) 1,158
Purchase of Real Estate
Contracts Receivable (128,182) (302,021) (146,500)
(Purchase) Redeem Tax Certificates 00 1,690 7,624
Acquisition of Equipment 00 00 (9,106)
Advance from (to) affiliate 00 00 (1,981)
Net Cash Provided (Used) by
Investing Activities $ 5,418 $ 40,165 $ 82,896
Cash Flows from Financing Activities:
Payments on Loans $ 00 $ 00 $ 00
Net Cash Provided (Used) by
Financing Activities $ 00 $ 00 $ 00
Net Increase (Decrease) in Cash and
Cash Equivalents $ (26,480) $ (1,868) $ 45,452
Cash and Cash Equivalents at Beginning
of Year 44,426 46,294 842
Cash and Cash Equivalents at
End of Year 17,946 44,426 $ 46,294
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Statement of Cash Flows
For the Years Ended September 30, 2006, 2005 and 2004
Reconciliation of Net Income to Cash Provided by Operating Activities
Year Ended September 30,
2006 2005 2004
Net Income (Loss) $ (26,508) $(72,254) $ (23,285)
Adjustments to Reconcile Net Income to
Net Cash Provided (Used) by:
Loss (Gain) on Sale of Real Estate(8,462) (26,435) (17,346)
Depreciation 3,072 3,786 3,187
Total Adjustments $ (5,390) 30,221 $ (14,159)
Net Cash Provided (Used) by Operating
Activities $ (31,898) $(42,033) $ (37,444)
Notes to Financial Statements are an integral part of these statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Notes to Financial Statements
Years Ended September 30, 2006, 2005 and 2004
Note 1 - Summary of Significant Accounting Policies
Nature of operations: The Company invests in real estate, primarily
single family residences, which it then resells on contract. The
Company operates exclusively in the Quad City metropolitan area of
Eastern Iowa and Western Illinois. The Company has a concentration of
credit risk, in that all of its creditors live and work in the Quad
City area.
Change in Method of Accounting for Income Recognition on Installment
Contracts: On October 1, 2005, the Company elected to change its
method of income recognition on installment contracts, to the
installment method, when the down payment by the purchaser was less
than 5%. In all prior years, income was recognized in the year of
sale on the accrual method. The new method of accounting was adopted
in accordance with Financial Accounting Standard #66, Accounting for
Sales of Real Estate, and comparative financial statements of prior
years have been adjusted to apply the new method retrospectively.
Accounting Policies: The books and records of the Company are
maintained on the accrual basis of accounting. Investments in
contracts receivable are stated at the collectible balance. Earnings
per share are computed on the basis of weighted average number of
common shares outstanding. Cash and cash equivalents are considered
to be any investment with an original maturity of three months or less.
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.
Other significant accounting policies are detailed in other Notes to
Financial Statements.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Notes to Financial Statements
Years Ended September 30, 2006, 2005 and 2004
Note 2 - Related Party Transactions
The Company has entered into a management consultant agreement with Oak
Helm Partners. The Company pays a retainer fee of $4,000 per month
Oak Helm Partners is an affiliated company due to common ownership
and control.
The Company occupies office space in a building located at 2920
Harrison Street, Davenport, Iowa, owned by OHP 5, LLC. The
Company rents approximately 700 square feet of space with furnishings
at a monthly rate of $1350 until January 1, 2010 when a new 5 year
lease will be signed. OHP 5, LLC is an affiliated entity due to
common ownership and control.
The following is a schedule of rent commitments for the next 5 years.
Year Ending:
September 30, 2007 16,200
September 30, 2008 16,200
September 30, 2009 16,200
September 30, 2010 4,050
The Company utilizes the employees of OHP 5, LLC. Beginning
in the fiscal year ended September 30, 2002, the Company paid OHP
5, LLC for it's prorata share of wages and payroll taxes.
Note 3 - Other Current Assets
2006 2005 2004
Account receivable-insurance $ 0 250 0
Account receivable-affiliate 0 26 26
Prepaid expenses 0 1,404 0
Real estate contracts receivable
current portion (Note 4) 6,059 5,278 6,548
Real estate tax certificates 0 0 1,690
Total $ 6,059 $ 6,958 $ 8,264
Note 4 - Real Estate Contracts Receivable
2006 2005 2004
Contracts receivable $587,177 $603,845 $ 643,938
Less current portion (Note 3) 6,059 5,278 6,548
Long-term portion $581,118 $598,567 $ 637,390
At September 30, 2006, 2005, and 2004 there were fourteen, fifteen,
and sixteen contracts receivable, respectively. The monthly payment
of principal and interest was $5,650 at September 30, 2006, $5,507 at
September 30, 2005, and $5,912 at September 30, 2004. Interest rates
on these contracts varies from 9.5% to 12%.
Management is of the opinion that an allowance for uncollectibility is
not necessary due to the collateral value of the properties.
HYNES & HOWES INSURANCE COUNSELORS, INC.
Notes to Financial Statements
Years Ended September 30, 2006, 2005 and 2004
Note 5 - Equipment
2006 2005 2004
Office equipment $19,252 $ 19,252 $ 19,252
Accumulated depreciation 14,050 10,264 6,478
Book value 5,202 8,988 12,774
Depreciation expense (A)$ 3,072 $ 3,786 $ 3,187
(A) Depreciation is calculated using 5-7 year, straight line rates.
Note 6 - Common Stock
The Company is authorized to issue 100,000,000 shares of no par value
common stock. Shares outstanding at September 30, 2006, 2005 and 2004
were 11,260,675. The Company has purchased 37,976 shares of treasury
stock, leaving 11,222,669 shares issued and outstanding.
Earnings (Loss) Per Share 2006 2005 2004
Net Income (Loss) $ (26,508) $ (72,254) $ (23,285)
Average number of shares
outstanding 11,222,699 11,222,699 11,222,699
Earnings Per Share $(0.002362) $(0.006438) $(0.002075)
HYNES & HOWES INSURANCE COUNSELORS, INC.
Notes to Financial Statements
Years Ended September 30, 2006, 2005 and 2004
Note 7 - Stock Held in Escrow
At September 30, 2006, 2005 and 2004 there were 3,546,000 shares of the
Company's common stock held in trust. Those shares were owned by the
Frank B. Howes Trust and by directors or former directors of the
Company. The Trust agreement was required by the Commissioner of
Insurance of the State of Iowa in order to gain approval of the
Company's stock issue of April, 1971. Under terms of this agreement
these shares were to be released after a period of five years or when
the Company attains certain profitable goals for three consecutive
years and upon written approval from the Commissioner of Insurance of
the State of Iowa. It is also required that should the Company
dissolve during this period that the pro-rated distribution of assets
to stockholders would be done on a basis which would pay these
shareholders less per share than would be distributable to the
shareholders of the new issue. The Company's earnings to date have not
been sufficient to qualify for the release of these shares held in
escrow. The condition requiring that these shares be held in escrow
for five years has been fulfilled, however, the Commissioner of
Insurance of the State of Iowa has not granted the written approval for
the release of these shares at this time. The shares will continue to
be held in escrow until the Commisioner grants written approval for
their release.
Note 8 - Contingent Liability for Rescission of Capital Stock Sales
Since its inception, the Company has issued and sold 11,222,699 shares
of its common stock. Although most of these shares were registered
with the State of Iowa, none of these shares were registered for sale
under the federal securities law. These shares were issued and sold in
reliance either upon the exemption provided in Section 4 (2) or Section
3 (a) (11) of the Securities Act of 1933.
The Company feels that any possible shares and federal contingent
liabilities that may have existed because of the issuance of securities
which may not have been exempt from registration under the Securities
Act of 1933 and unless the subject of an existing legal proceeding
filed appropriately, may now be extinguished as a result of the new
Iowa Uniform Securities Act which became effective on January 1, 1976
under Section 613 of that Act, liability must now be ascertained by
looking to the statute in effect at the time that the stock issue was
sold. The two year statute of limitations in effect on January 14,
1973, at the time of the closing of the issue has run, as have the
other applicable federal statutes of limitation. As a result, with
the exception of the Federal and State Tolling Doctrines, possible
contingent liabilities may no longer exist.
Note 9 - Contingent Liability on Pending Litigation
On November 2, 1973, in U. S. District Court a Final Judgment of
permanent Injunction was brought against the Company because of a
complaint filed by the Securities and Exchange Commission. The
Injunction enjoins the Company from failing to file timely and proper
reports as required by Section 12 (a) of the Securities Exchange Act
of 1934. The Company is currently complying with filing requirements,
however, it may be subject to subsequent court action and potential
fine if there are future filing deficiencies.
Note 10- Provision for Income Taxes
Due to loss carryforwards from previous years, a provision for income
taxes has not been made.
Net operating loss carryovers will expire as follows:
September 30, 2007 115,144
September 30, 2010 6,515
September 30, 2017 4,385
September 30, 2022 6,032
September 30, 2023 38,528
September 30, 2024 23,285
September 30, 2025 44,667
September 30, 2026 54,095
________
Total deferred income tax: $292,651
Less-valuation allowance (292,651)
________
Net Deferred Income Tax $ 0
EX-99.23
ART. 5 FDS FOR 9/30/06
PERIOD-TYPE 12-MOS
FISCAL-YEAR-END SEP-30-2006
PERIOD-END SEP-30-2006
CASH 17,946
SECURITIES 0
RECEIVABLES 581,118
ALLOWANCES 0
INVENTORY 0
CURRENT-ASSETS 24,005
PP&E 19,252
DEPRECIATION 14,050
TOTAL-ASSETS 611,039
CURRENT-LIABILITIES 11,333
BONDS 0
PREFERRED-MANDATORY 0
PREFERRED 0
COMMON 3,780,765
OTHER-SE 100
TOTAL-LIABILITY-AND-EQUITY 611,039
SALES 0
TOTAL-REVENUES 71,624
CGS 0
TOTAL-COSTS 98,132
OTHER-EXPENSES 0
LOSS-PROVISION 0
INTEREST-EXPENSE 0
INCOME-PRETAX (26,503)
INCOME-TAX 0
INCOME-CONTINUING 0
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME (26,508)
EPS-PRIMARY 0
EPS-DILUTED 0
exhibit31
EXHIBIT (31)
RULE 13a-14(a)/25d-14(a) CERTIFICATIONS
I, Joseph Coon, certify that:
(1) I have reviewed this 10K of Hynes and Howes Insurance Counselors;
(2) Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circum-
stances under which such statements were made, not misleading
with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosures controls and procedures
(as defined in Exchange Act Rules 12a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this report (the "Evaluation Date"); and
c) Presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors:
a) All significant deficiencies in the design of operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in this
report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Joseph Coon
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(Joseph Coon)
President
December 15, 2006
exhibit32
EXHIBIT (32)
SECTION 1350 CERTIFICATIONS
Pursuant to 19 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, the undersigned officer of Hynes & Howes Insurance
Counselors, Inc. (the Company) certifies to his knowledge that:
(1) The Annual Report on Form 10-K of the Company for the year ended
September 30, 2006, fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in that Form 10-K fairly presents, in all
material respects, the financial condition and results of operations
of the company.
Joseph Coon
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(Joseph Coon)
President
December 15, 2006