SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For fiscal year ended 12-31-97. Commission file number 33-20720-LA:
ZENITH VENTURES CORPORATION.
(Exact name of registrant as specified in its charter)
Delaware 77-0181849
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
20862 Sarahills Drive, Saratoga, CA 95070
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 867-4407 Securit-
ies registered pursuant to Section 12(b) of the Act: None Securities register-
ed pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ___X____ No___
5,010,000 shares were outstanding on December 31, 1997.
ZENITH VENTURES CORPORATION.
FORM 10-K
Fiscal Year ended December 31, 1997
TABLE OF CONTENTS
PART I
Item 1 Business
Item 2 Property
Item 3 Legal Proceedings
Item 4 Submission of Matters to a Vote of Security Holders
PART II
Item 5 Market for Registrant's Common Equity and related Stockholder
Matters
Item 6 Selected Financial Data
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 8 Financial Statements and Supplementary Data
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
PART III
Item 10 Directors and Executive Officers of the Registrant
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management
Item 13 Certain Relationships and Related Transactions
Item 14 Exhibits, Financial Statement, Schedules, and Reports
PART I
Item 1 Business
General
Zenith Ventures Corporation ("Zenith" or the "Company") is a Delaware
corporation formed on February 16, 1988.
The Company has developed certain computer-related products and is currently
engaged in pursuit of marketing opportunities on the Internet. Management also
spends a portion of its time seeking additional business opportunities for
the Company.
PUBLIC OFFERING OF SECURITIES
The Company made no offering of public securities during the period.
Item 2 - Property
The Company maintains an executive office in Saratoga, California provided
by the management at no charge.
Item 3 Legal Proceedings
The Company has filed a cross complaint against a former marketing
representative of a company in which the Company owns an equity interest and
a former Vice President and Director of the Corporation. Its complaint
prays for award of damages resulting from breach of fiduciary duty by its ex
officer and director, breach of contract by him and the former
representative, and for a joint conspiracy to usurp copyrights, trademarks,
and intellectual property belonging to the Company.
Item 4 - Submission of Matters to a Vote of Security Holders
The Company's fiscal year ended December 31, 1997; the Company presently
intends to hold its annual meeting of stockholders in July 1998.
PART II
Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters
Market Information
The Company's Stock has been publicly traded since January 11, 1989 on
the over-the-counter market. Current trading is inactive.
Holders
As of December 31, 1997, there were approximately 100 shareholders of
record of the Company.
Dividends
The Company has not paid or declared any dividends upon its common stock
since its inception and has no present intention of paying any cash dividends
on its common stock in the foreseeable future.
Item 6 - Selected Financial Data
This information has been deliberately omitted as permitted for a
company subject to Section 15(d) reporting requirements having become subject
to said Section as a result of its Form S-18 Registration Statement.
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Computer Software
On July 12, 1989, the Company acquired all rights to the business of Celtek,
Inc.
Under terms of the agreement, The Company will pay Celtek ten percent
(10%) of the operating margin from sales of Products, as defined in the
agreement, not to exceed a cumulative payment of four million dollars
($4,000,000) or for a period of ten years, whichever comes first. The
agreement also secures for the Company the services of Celtek in operation of
the business, and options at any time to purchase the remainder of said
royalty stream or Celtek itself for cash or kind. Celtek is given a recise
of the remaining royalty stream for kind, as defined in the agreement.
On December 11th, 1989, Zenith entered into an agreement with Damask
Trading Limited ("Damask") for management of international marketing,
distribution, and sales of Celtek products, and for assistance with funding
of such market penetration.
On January 24th, 1990, as a corollary to its agreement with Damask
Trading, Zenith appointed RAT International (Marketing) Ltd. ("RAT") its
exclusive agent for sale of certain of its software products except for the
US and UK. During the second quarter of 1997, this appointment was
terminated by the Company for default.
Changes to Officers and Directors
There have been two changes to the Board of Directors during the period.
Dr. C.N. Chang and Mr. Christopher Bearman have been replaced by Dr. S. M.
Breitling and L. K. Steele.
Other Potential
Management regularly devotes a percentage of its time to a search for
additional business opportunities for the Company.
Item 8 - Financial Statements and Supplementary Data
No Accountants' Report for Zenith is currently ready; so, the financials
supplied herewith are of necessity un-audited.
Item 9. - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no disagreements with accountants during the period.
The previous auditing firm had to resign the account as a result of its
decision to abandon SEC practice, however, and the Company has yet to appoint
a successor.
PART III
Item 10 - Directors and Executive Officers of the Registrant
The Company has the following Directors, Executive Officers and
significant employees:
NAME AGE
George Didinger, President, Director & Assistant Secretary 72
S. M. Breitling, Director and Secretary 58
L. K. Steele, Director and Treasurer 40
George Didinger, the Company's President and a Director are a
Professional Engineer with Bachelor's and Master's Degrees in Electrical
Engineering and a Ph.D. in Applied Mathematics. During World War II, he was
commissioned at the US Naval Academy and served subsequently as an engineer-
ing officer at sea. Returning to civilian life after the war, he became
Instructor and Assistant Professor of Electrical Engineering at the Univer-
sity of Pittsburgh. His industrial career began with Union Carbide Corpo
S. M. Breitling, the company's Director and Secretary obtained his
formal education at the University of Utah from which he holds the degrees
of Bachelor of Science and Doctor of Philosophy in Chemistry. He also
completed a post-doctoral fellowship at Utah in Materials Science and
Engineering. For ten years following completion of his fellowship
Dr. Breitling pursued a career in research as Assistant Research Professor
and Research Associate, Department of Materials Science and Engineer
ch Assistant Professor and Adjunct Assistant Professor, Department of
Metallurgical and Materials Engineering, University of Pittsburgh; and,
Senior Fellow, Carnegie Mellon Institute of Research During his career in
research, Dr. Breitling also served as Consultant to the Commonwealth of
Pennsylvania's Science and Engineering Foundation, the United States
Commerce Department's Technical Advisory Board, and the Wasatch Division of
Thiokol Corporation. Principal areas of this consultation inclu
hnology, sulfur emission control technology, solid propellant missile
motor failure prediction through accelerated aging analysis, and
manufacturing process instrumentation and control.. Dr. Breitling later
became a full time independent consultant in Materials Science. His
principal sustaining clients were the nation's leading producers of solid
propellant materials and Motors. He is currently full time branch manager
for the US Air Force Phillips Laboratory. Dr. Breitling is a member of the
American Physical Society, and Sigma Xi and is author of more than two dozen
advanced papers on Physical Chemistry and Materials Science.
After completing her financial education, L.K. Steele, the Company's
Director and Treasurer, began her business career as an accountant with a
regional manufacturer in California. She next joined a mid-size accounting
firm, responsible for audit, client financial statements, financial analysis,
and tax reporting. Engaged by a small public corporation as Director and
Chief Financial Officer, she was active in fund raising, and responsible for
fiscal control, auditor liaison, SEC reporting, and investor reame Director
and President of North American Operations for an Australian conglomerate,
offering services for: financial management, private placements, escrow
management, chartering international corporations, corporate direction and
management, chartering and managing all required financial accounts, share
holder relations, public relations, investor search, and acquisition. She is
currently a Director of Netgate Communication Systems.
Item 11 - Executive Compensation
None of the officers or directors of the Company have received a salary
from the Company at this time. Compensation is being accrued for the
officers, at rates reflecting their part time availability. The Board of
Directors intends to authorize payment of such accruals when, in its
judgment, the Company is in a more favorable financial position.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
a) Security ownership of certain beneficial owners.
Amount and
Name of Nature of
Title of Beneficial Beneficial Percent
Class Owner Ownership of_Class
President, George Didinger 350,000 7
Director & 20862 Sarahills Drive shares of common stock
Asst. Secy. Saratoga, CA 95070
Henri Hornby 1,300,000 26
3653 Hemlock Court shares of common stock
Reno, Nevada 89509
(b) Security ownership of management.
Amount and
Name of Nature of
Title of Beneficial Beneficial Percent
Class Owner Ownership of_Class
President, George Didinger 350,000 7
Director & 20862 Sarahills Drive shares of common stock
Asst. Secy. Saratoga, CA 95070
All Officers 350,000 7
and Directors shares of common stock
Item 13 - Certain Relationships and Related Transactions.
Within the meaning of this section, no new special relationships nor related
transactions occurred during the period.
Item 14 - Exhibits, Financial Statement, Schedules, and Reports on Form 8-K
(a) The following documents are filed as a part of the report:
1. Financial statements:
Consolidated balance sheet at December 31, 1996 and 1997
Consolidated statement of operations for the years ended December 31, 1996
and 1997
Consolidated statement of cash flows for the years ended December 31, 1996
and 1997.
Consolidated statement of shareholders' equity for the year ended December
31, 1997
ZENITH VENTURES CORPORATION
PART II - FINANCIAL INFORMATION
Item 1. Financial Statements
ZENITH VENTURES CORPORATION
CONSOLIDATED BALANCE SHEET
For the period ended
Dec. 31, 1997 Dec. 31, 1996
Total Cash 8,653 22,661
Accounts receivable 513 513
Securities at market 18,000 18,000
---------------- ----------------
Total current assets 27,166 41,174
Other assets
Total fixed assets 7,571 7,571
---------------- -----------------
Total assets 34,737 48,745
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses 595,547 520,539
Shareholders' equity
Common stock, at $0.001 par value 5,000 5,000
Additional paid in capital 503,600 503,600
Class A & B warrants 1,000 1,000
Accumulated deficit (1,070,410) (981,393)
Total shareholders' equity (560,810) (471,793)
Liabilities and shareholders' equity 34,737 48,746
Prepared without audit
See accompanying notes to financial statements
ZENITH VENTURES CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the period ended
Dec. 31, 1997 Dec. 31, 1996
General and administrative expense 89,232 151,573
Total operating expense 89,232 151,573
Net operating income (loss) (89,232) (151,573)
Interest income 215 47,424
Net income (loss) before taxes (89,017) (104,149)
Net income (loss) per common share (0.018) (0.021)
Average number of
common shares outstanding 5,010,000 5,010,000
Prepared without audit
See accompanying notes to financial statements
ZENITH VENTURES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
For the period ended
Dec. 31, 1997 Dec. 31, 1996
Net income (loss) for the period (89,017) (151,573)
Changes in assets and liabilities 75,008 128,308
Changes in accounts receivable
Net cash used for operations (14,008) (23,265)
Net increase (decrease) in cash (14,008) (23,265)
Cash at beginning of period 22,662 45,927
Cash at end of period 8,654 22,662
Prepared without audit
See accompanying notes to financial statements
ZENITH VENTURES CORPORATION STATEMENT OF SHAREHOLDERS' EQUITY
Deferred
Additional Stock
Par Paid in offering Accumulated
Shares Value capital Warrants Expense deficit Total
=============== ======== ==== ====== ======== ======= ========= =====
Initial sale of
common stock 1,500,000 1,500 22,500 24,000
Issuance of Class
A & B warrants 1,000
Deferred stock
offering expense
Incurred (17,700)
Net loss for the
period from
inception through
31 Dec 1988 (4,400) (4,400)
Balance at
12/31/88 1,500,000 1,500 22,500 1,000 (17,700) (4,400) (4,400)
Initial public
offering net of
issuance costs 510,000 500 483,500 17,700 501,700
Issuance of
common stock for
acquisition 3,000,000 3,000 (2,400) 600
Balance at 31
December 1997 5,010,000 5,010 503,600 1,000 (1,070,410) (560,810)
Prepared without audit
See accompanying notes to financial statements
ZENITH VENTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Significant accounting policies
The Company financial statements include the accounts of Zenith Ventures
Corporation and its wholly owned subsidiary Epic Industries, Inc. All
significant inter company transactions have been eliminated.
Cash equivalent
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
Income taxes
Provision for income taxes will be based on results of operations as reported
in the financial statements. The Company has net operating loss carry
forwards at December 31, 1997, which may be utilized to reduce taxable income
in the future. No asset has been recorded for the potential future tax benefit
of this loss due to its realization not being assured. The Company has not
adopted the provisions of Statement of Financial Accounting Standards, no.96,
accounting for income taxes. However, there would be financial statements
had such statement been adopted during the periods presented.
Earnings per share
Earnings (loss) per share are based on the weighted average number of shares
outstanding during each year.
Note 2 - Capital stock
The Company has one class of common stock with $.001 par value. There are
50,000,000 shares authorized, of which 5,100,000 were outstanding as of
December 31, 1997.
Note 3 - Acquisition of technology and rights and obligations for royalties:
During 1989, the Company entered into several transactions for the
acquisition of technology and product rights.
Under the terms of these agreements, the Company has rights to the operating
margin from the sale of products and is also generally obligated to pay a
royalty to the sellers of the technologies based upon the operating margin as
such margin is defined in the individual contracts generated by product sales.
Note 4 - Income taxes
No provision for income taxes has been recorded for any year through 1997
because the Company has a net operating loss for each year. As of December
31, 1997, the Company has consolidated net operating loss carry forwards of
approximately $1,070,410, which may be utilized to offset future taxable income.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
February 17, 1998 Zenith Ventures Corporation
By /s/ George H. Didinger
George H. Didinger, President