THIS DOCUMENT IS A COPY OF THE 10-K FILED ON MARCH 26, 1997 PURSUANT TO A RULE
201 TEMPORARY HARDSHIP EXEMPTION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal year ended December 31, 1996
- ------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ______________
Commission file number: 0-23328
ZERON ACQUISITIONS II, INC.
(Exact Name of Registrant as Specified in its Charter)
NEVADA 13-3666344
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
370 Lexington Avenue, 19th Floor, New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (212) 687-4230
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
________________________________ ______________________________
________________________________ ______________________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
_________________________________________________________________
(Title of class)
_________________________________________________________________
(Title of class)
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 such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the date of
filings. (See definition of affiliate in Rule 405).
The aggregate market value of the voting stock held by non-affiliates of the
registrant is $625,000.00.
Note: If a determination as to whether a particular person or entity is an
affiliate cannot be made without involving unreasonable effort and expense,
the aggregate market value of the common stock held by non-affiliates may be
calculated on the basis of assumptions reasonable under the circumstances,
provided that the assumptions are set forth in this form.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the issuer has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.001 par value 278,750
(Title of Class) (Shares outstanding at
December 31, 1996)
ZERON ACQUISITIONS II, INC.
FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1996
INDEX Page
PART I
Item 1 Business 1
Item 2 Properties 1
Item 3 Legal Proceedings 1
Item 4 Submission of Matters to a Vote of
Security Holders 1
PART II
Item 5 Market for the Registrant's Securities
and Related Stockholder Matters 2
Item 6 Selected Financial Data 2
Item 7 Management's Discussion and Analysis
of Financial Condition and Results
of Operations 2
Item 8 Financial Statements and Supplementary
Data 2
Item 9 Disagreements on Accounting and
Financial Disclosure 3
PART III
Item 10 Directors and Executive Officers
of the Registrant 3
Item 11 Executive Compensation 5
Item 12 Security Ownership of Certain Beneficial
Owners and Management 5
Item 13 Certain Relationships and Related
Transactions 6
PART IV
Item 14 Exhibits, Financial Statement, Schedules
and Reports on Form 8-K 6
Signatures 14
PART 1
Item 1. Business
The Company was incorporated on March 6, 1992 in the State of
Nevada. The Company was formed to provide a vehicle to acquire
or merge with a business or company. As of December 31, 1996,
the Company has no plan, proposal, agreement, understanding or
arrangement to acquire or merge with any specific business or
company.
Item 2. Properties
The Company at present has no real property and maintains an
office at the office of its President, Gary Takata, at 370
Lexington Avenue, Suite 1808, New York, New York 10017.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
There is no established public trading market for the Company's
Common Stock.
Number of Shareholders - 24
Item 6. Selected Financial Data
1996 1995 1994
Income from Operations $ 0 $ 0 $ 0
Total Current Assets 532,668 568,105 604,660
Other Assets 17 117 217
Total Assets 532,685 568,222 604,877
Total Current Liabilities 15,300 7,100 8,750
Long-Term Obligations 0 0 0
Dividends 0 0 0
Total Stockholders Equity 517,385 561,122 596,127
Item 7. Management's Discussion and Analysis of Results of
Operations
The Company's public offering was declared effective on July 14,
1993. The Company offered a total of 200,000 Common Shares (par value $.001
per share) and a minimum of 100,000 Common Shares at an offering price of
$6.25 per Share. On January 13, 1994, the Company closed on 100,000 Shares
for an aggregate $625,000.
At December 31, 1996, the Company's current assets amounted to
$532,668, while current liabilities amounted to $15,300. In addition,
organization costs amounted to $17. The Company earned interest income of
$23,426. The Company incurred expenses including legal fees in the amount of
$67,163 in connection with the investigation of potential acquisition
candidates.
During 1996, the Company incurred expenses of $29,905 in connection
with its investigation of potential business ventures and an attempted
acquisition.
Item 8. Financial Statements
Attached
Item 9. Disagreements on Accounting and Financial Disclosures
None
PART III
Item 10. Directors and Executive Officers
The executive officers and directors of the Company are as follows:
Name Age Position(s) Held
Gary Takata 62 President, Secretary-
370 Lexington Avenue, 19th Fl. Treasurer and Director
New York, New York 10017
Shigeru Masuda 51 Chairman of the Board
117 East 57th Street of Directors
New York, New York 10022
Gary Takata (age 62), has been the Company's President, Secretary-Treasurer
and Director since inception on March 6, 1992. Mr. Takata was president,
secretary-treasurer and director of Zeron Acquisition I, Inc., a Nevada
corporation (formerly Pilgrim Acquisition Corp.) from its inception on August
15, 1989 until his resignation on April 30, 1992. Zeron Acquisition I, Inc.
acquired Advanced Orthopedic Technologies, Inc. on April 30, 1992. Advanced
Orthopedic Technologies, Inc. is engaged in the business of providing
professional prosthetic and orthotic services to the general public. Mr.
Takata was also a principal founder of and has served as a Director of
Oncogene Science, Inc. from May, 1983 to the present, T-Cell Sciences, Inc.
from January, 1984 to July, 1986, Hollywood Way Pictures from April 15, 1986
to the present, IFF International (formerly Wellsway Ventures, Inc.) from
September 23, 1986 until September, 1987, and Global Venture Corporation from
May, 1986 to July, 1989. Global Venture Corporation, an inactive public shell,
acquired Pribilof Island Processors, Inc. located in the Bering Sea on July
26, 1989. Pribilof Island Processors, Inc. is a processor of crabs and fish.
From April, 1988 until December, 1989, Mr. Takata was a principal founder of
and had served as a Director of Telor Ophthalmic Pharmaceutical Inc., a
Delaware company engaged in drug development for eye disorders. From March
6, 1992 to the present, Mr. Takata has also been the president, secretary-
treasurer and director of Jupiter Acquisitions, Inc., a "blank check" company
incorporated under the laws of the State of Nevada on March 6, 1992. From
June 15, 1992 until his resignation in Janauary, 1994, Mr. Takata has also
been the president, secretary-treasurer and director of Vista Technologies,
Inc. (formerly Mercury Acquisitions, Inc.). Since December, 1992 to August
30, 1993, Mr. Takata was also a director and 50% shareholder of The
S.I.N.C.L.A.R.E. Group, Inc. (formerly Third Lloyd Funding, Inc.), a company
incorporated under the laws of the State of New York on August 20, 1990. From
November 16, 1992 to the present, Mr. Takata has also been the president,
secretary and director of Neptune Acquisitions, Inc., Juno Acquisitions, Inc.,
Athena Acquisitions, Inc., Saturn Acquisitions, Inc. and Mars Acquisitions,
Inc., "blank check" companies incorporated under the laws of the State of Nevada
on November 16, 1992.
Mr. Takata was a Director of Medi-RX America, Inc. from March, 1986 to
February, 1988, and Neurotech Corporation from June, 1986 to May, 1988. From
January, 1984 to August, 1986, Mr. Takata was a partner of Seed Equities, a
partnership engaged in venture capital. Previously, Mr. Takata was employed
at Philips Appel & Walden, Inc. (member New York Stock Exchange) from 1961 to
1983. He received a BBA in 1956 and an MBA (with distinction) from the
University of Michigan in 1958. Mr. Takata is engaged in other activities and
will devote at least 10 hours per month to the activities of the Company. In
addition to the time to be devoted by Mr. Takata to the Company, Mr. Takata
has agreed to devote 150 hours of his time to the affairs of other companies
of which he is an officer and director.
Shigeru Masuda (age 51), has been Chairman of the Board of Directors of
the Company since inception on March 6, 1992. Mr. Masuda was a director of
Zeron Acquisition I, Inc., a Nevada corporation (formerly Pilgrim Acquisition
Corp.) from its inception on August 15, 1989 until his resignation on April
30, 1992. Zeron Acquisition I, Inc. acquired Advanced Orthopedic
Technologies, Inc. on April 30, 1992. Advanced Orthopedic Technologies, Inc.
is engaged in the business of providing professional prosthetic and orthotic
services to the general public. From March 6, 1992 to the present, Mr. Masuda
has also been the chairman of the board of directors of Jupiter Acquisitions,
Inc., a "blank check" company incorporated under the laws of the State of
Nevada on March 6, 1992. From June 15, 1992 until his resignation in January,
1994, Mr. Masuda has also been the chairman of the board of directors of Vista
Technologies, Inc. (formerly Mercury Acquisitions, Inc.). Mr. Masuda has been
the Chairman of The ZERON Group, Inc., (formerly known as ORIX Corporation)
since May, 1989. Based in New York, The ZERON Group is a private merchant
bank and investment management company which participates mainly in Japanese
and U.S. growth stocks. The ZERON Group also advises on strategic alliances
between Japanese and U.S. companies. Mr. Masuda has also been the president
of Zeron Capital Management, Inc. since May, 1989. From 1978 to 1980, Mr.
Masuda was President of S. Masuda Inc., an international management consulting
firm. Mr. Masuda is also Chairman of ZYRUS Corporation, a computer software
development company in Japan, founded in 1989. Mr. Masuda served as Senior
Consultant to Booz, Allen & Hamilton, international management consultants
from 1973 to 1977, and from 1978 to 1983 he served as Senior Advisor to Booz,
Allen & Hamilton (Japan). During the course of his career, Mr. Masuda has
served as consultant and advisor on international business strategies to the
senior executives of many leading U.S. and Japanese corporations. Mr. Masuda
is a member of The Forum for Policy Innovation (Japan), a roundtable of
prominent Japanese businessmen. Mr. Masuda, a Japanese citizen, received his
B.A. from Keio University in Tokyo in 1966 and his MBA from Columbia Graduate
School of Business in 1973. Mr. Masuda has devoted up to 5 hours per months
to the activities of the Company.
Item 11. Executive compensation
Pursuant to an oral agreement, the Company is renting office space,
on an annual basis, from Gary Takata, the Company's President, Secretary-
Treasurer and Director. The office is located at 370 Lexington Avenue, Suite
1808, New York, New York 10017, at an annual fee of $15,000 payable monthly.
There are no employment agreements contemplated for the services of
the Company's officers and directors nor current intentions to compensate
officers and directors in the future.
Item 12. Management's Remuneration and Transactions
a. Security Ownership of Certain Beneficial Owners
The following table sets forth the number and percentage, as of
December 31, 1996 of the Company's Common Shares owned of record and
beneficially by each person owning more than 5% of such Common Shares and by
all officers and directors, as a group. Each of these persons may be deemed a
parent and promoter as those terms are defined in the Act.
Name of Amount & Nature
Beneficial of Beneficial Percentage
Title of Class Owner Ownership of Class
Common Shigeru Masuda 80,000 28.70%
Louise Jones Takata 74,000 26.55%
b. Security Ownership of Management
Shigeru Masuda 80,000 28.70%
Louise Jones Takata 74,000 26.55%
All Officers and
Directors as a
Group (1) as of
December 31,
1996 80,000 28.70%
Item 13. Certain Relationships and Related Transactions
1. The Company currently utilizes the office of its President,
Secretary-Treasurer and Director, Gary Takata, at 370 Lexington Avenue, Suite
1808, New York, New York 10017. Pursuant to oral agreement, these facilities
are provided on an annual basis for $15,000 per year commencing January 14,
1994, the closing of the Company's public offering.
2. The Company entered into a consulting agreement with The
Zeron Group, Inc., a New York corporation. Shigeru Masuda, the Company's
Chairman of the Board of Directors, has been chairman of The Zeron Group, Inc.
since May, 1989. The annual fee pursuant to the agreement is $15,000
commencing January 14, 1994, the closing of the Company's public offering.
Pursuant to the consulting agreement, The Zeron Group, Inc. will devote up to
five hours per month in the search for and evaluation of potential acquisition
candidates.
3. On November 19, 1996, Gary Takata, the Company's President
and Director, gifted 80,000 shares of common stock to Louise Jones Takata for
no consideration. Louise Jones Takata is the wife of Gary Takata.
4. On December 13, 1996, Louise Jones Takata gifted 6,000 common
stock to One World Asset Management Limited, a Bermuda corporation, for no
consideration.
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports
on Form 8-K
(1) Form 8-K dated March 6, 1997 is hereby incorporated by
reference.
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Zeron Acquisitions II, Inc.
370 Lexington Avenue, 19th Floor
New York, New York 10017
We have audited the accompanying balance sheet of Zeron Acquisitions II,
Inc. as of December 31, 1996 and the related statements of operations,
stockholders' equity and cash flows for the year then ended and the 1996
amounts included in the cumulative period March 6, 1992 (inception) through
December 31, 1996. 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 audit. The balance sheet of Zeron
Acquisitions II, Inc. as of December 31, 1995 and the related statements of
operations, stockholders' equity and cash flows for the years ended December
31, 1995 and 1994 and the March 6, 1992 (inception) through December 31, 1995
amounts included in the cumulative period March 6, 1992 (inception) through
December 31, 1996 were audited by another auditor whose report dated February
27, 1996 expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. These 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 audit provides 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 Zeron Acquisitions
II, Inc. as of December 31, 1996, and the results of its operations and cash
flows for year then ended, in conformity with generally accepted accounting
principles.
Respectfully submitted,
/s/ Mayer Rispler & Company, P.C.
Mayer Rispler & Company, P.C.
Certified Public Accountants
March 18, 1997
Brooklyn, New York
ZERON ACQUISITIONS II, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
December 31,
1996 1995
Current Assets
Cash and Equivalents (Note 1) $ 530,337 $ 568,105
Loan Receivable 2,331 -0-
Total Current Assets $ 532,668 $ 568,105
Other Assets
Organization Costs-Net of Amortization
(Note 1) 17 117
TOTAL ASSETS $ 532,685 $ 568,222
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payables and Accrued Expenses $ 15,300 $ 7,100
Commitments and Other Matters (Note 3)
Stockholders' Equity (Note 2)
Common Stock, par value $.001; authorized
75,000,000 shares, issued and outstanding
278,750 shares in 1996 and 1995 279 279
Preferred Stock, par value $.001 authorized
15,000,000 shares, none issued and outstanding -0- -0-
Additional Paid-In Capital 624,860 624,860
Deficit Accumulated During Development Stage (107,754) (64,017)
TOTAL STOCKHOLDERS' EQUITY 517,385 561,122
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 532,685 $ 568,222
The accompanying notes are an integral part of this financial statement.
ZERON ACQUISITIONS II, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
March 6, 1992
(Inception)
through
1996 1995 1994 December 31, 1996
INTEREST INCOME: $ 23,426 $ 16,268 $ 12,614 $ 52,645
EXPENSES:
Consulting (Note 3) 15,000 15,000 14,375 44,375
Rent (Note 3) 15,000 15,000 14,375 44,375
Corporation Franchise
Taxes 2,467 3,291 729 7,236
Filing Fees 4,244 3,996 2,689 11,119
Amortization 100 100 100 483
Bank Charges 447 405 340 1,935
Office -0- 500 1,340 1,840
Professional Fees 29,905 12,981 5,850 49,036
NET LOSS $(43,737) $(35,005) $(27,184) $(107,754)
NET LOSS PER COMMON
SHARE $( .16) $( .13) $( .10)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 278,750 278,750 278,750
The accompanying notes are an integral part of this financial statement.
ZERON ACQUISITIONS II, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Total
Additional Stock-
Common Paid-In Accumulated Holders
Stock Capital (Deficit) Equity
Issuance of Common Shares on
June 4, 1992 at par value
($.001 per share) For Cash $160 $ 1,440 $ 1,600
Sale of 18,750 Shares for Cash
in July, 1992 19 29,981 30,000
Net Loss-Inception to December
31, 1992 $ (62) ( 62)
Net Loss-December 31, 1993 (1,766) (1,766)
Sale of 100,000 Shares-
January 13, 1994 100 624,900 625,000
Deferred Offering Costs Charged
to Paid-In Capital (31,461) (31,461)
Net Loss-December 31, 1994 (27,184) (27,184)
Balance-December 31, 1994 279 624,860 (29,012) 596,127
Net Loss (35,005) (35,005)
Balance-December 31, 1995 279 624,860 (64,017) 561,122
Net Loss (43,737) (43,737)
Balance-December 31, 1996 $279 $624,860 $(107,754) $517,385
The accompanying notes are an integral part of this financial statement.
ZERON ACQUISITIONS II, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
March 6, 1992
(Inception)
through
1996 1995 1994 December 31, 1996
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(43,737) $(35,005) $(27,184) $(107,754)
Adjustments to reconcile
net loss to net cash used
in operating activities
Amortization 100 100 100 483
CHANGES IN ASSETS AND
LIABILITIES:
Loan Receivable (2,331) (2,331)
Other Assets -0- -0- 21,306 (500)
Accounts Payable and
Accrued Expenses 8,200 (1,650) 8,750 15,300
Cash Provided (Used) in
Operations (37,768) (36,555) 2,972 (94,802)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of Common Stock-
Net of Costs -0- -0- 593,539 625,139
NET INCREASE (DECREASE) IN
CASH & EQUIVALENTS (37,768) (36,555) 596,511 530,337
CASH & EQUIVALENTS -
BEGINNING OF YEAR 568,105 604,660 8,149 -0-
CASH & EQUIVALENTS -
END OF YEAR $530,337 $568,105 $604,660 $ 530,337
The accompanying notes are an integral part of this financial statement.
ZERON ACQUISITIONS II, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Background
Zeron Acquisitions II, Inc. (the Company) was organized under the laws of
the State of Nevada on March 6, 1992. Its purpose is to provide a vehicle to
acquire or merge with another entity. Since the Company has not yet begun
operations, it is considered a development stage Company.
Cash & Equivalents
Cash and equivalents are stated at cost plus accrued interest. The
Company considers all highly liquid investments with a maturity date of three
months or less to be cash equivalents.
Concentration of Credit Risk
At December 31, 1996 and 1995, the Company maintained all its cash in one
commercial bank.
Organization Costs
Organization costs are being amortized on the straight line method over a
period of five years.
Loss Per Share of Common Stock
Net loss per share of common stock is based on the weighted average
number of shares outstanding during each period.
NOTE 2 - STOCKHOLDERS' EQUITY
The Company is authorized to issue 75,000,000 common shares with a par
value of $.001, and 15,000,000 blank check preferred shares with a par value
of $.001. On June 4, 1992, the Company issued a total of 160,000 shares of
its common stock to its officers for a total consideration of $1,600 ($.01 per
share).
On June 4, 1992, the Board of Directors authorized the sale, through a
self underwriting, a minimum of 100,000 Common Shares and a maximum of 200,000
Common Shares at $6.25 per share.
During the period of July 1, 1992 through July 15, 1992, the Company
issued a total of 18,750 shares of its common stock ($.001 par value) to
various individuals for a total consideration of $30,000 ($1.60 per share).
ZERON ACQUISITIONS II, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STTEMENTS
DECEMBER 31, 1996
(CONTINUED)
On January 14, 1994, the Company closed on the minimum of 100,000 shares
at an aggregate of $625,000.
NOTE 3 - COMMITMENTS AND OTHER MATTERS
a. The Company currently utilizes the office of its President.
Pursuant to an oral agreement, these facilities are provided on an annual
basis for $15,000 per year commencing January 14, 1994, the closing of the
Company's public offering.
b. The Company entered into a consulting agreement with the Zeron
Group, Inc., a New York corporation. The Company's Chairman of the Board of
Directors, has been chairman of the Zeron Group, Inc. since May, 1989. The
annual fee pursuant to the agreement is $15,000 commencing January 14, 1994,
the closing of the Company's public offering. Pursuant to the consulting
agreement, the Zeron Group, Inc. will devote up to five hours per month in the
search for and evaluation of potential acquisitions.
c. Certain conflicts of interest have existed and will continue to
exist between management, their affiliates and the Company. Management have
other interests including business interests to which they devote their primary
attention. Management may continue to do so not withstanding the fact that
management time should be devoted to the business of the Company and in
addition, management may negotiate an acquisition resulting in a conflict of
interest and possibly, a breach of directors' duty of loyalty to the Company.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ZERON ACQUISITIONS II, INC.
(Registrant)
Gary Takata
By:________________________________
Gary Takata
President, Secretary-Treasurer
and Director
Date: 3/26/97
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicates.
Gary Takata
By:________________________________
Gary Takata
President, Secretary-Treasurer
and Director
Date: 3/26/97