SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 16, 2002
AVONDALE CAPITAL I CORP.
(Exact name of registrant as specified in its charter)
Oklahoma 0-32593 73-1599600
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3033 N.W 63rd Street, Suite 200
Oklahoma City, Oklahoma 73116-3607
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(Address of principal executive offices) (Zip Code)
(405) 235-5728
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
Effective on September 16, 2002, Avondale Capital I Corp. an Oklahoma
corporation ("Avondale") acquired all of the shares of stock of FHW, Inc. an
Oklahoma corporation ("FHW"). The Securities Purchase Agreement, a copy of which
is attached as Exhibit 2.1 to this Current Report on Form 8-K, provided that the
sole shareholder of FHW was to receive as consideration for the purchase of the
stock shares of common stock of Avondale.
FHW provides consulting services to businesses primarily in the nature of
finance, bank lending and other forms of corporate finance. Such services are
provided primarily through Frank H. Ward, who has become a part of Avondale's
ownership and management as the Executive Vice President and member of the Board
of Directors. Avondale intends to continue to provide such services.
Mr. Frank H. Ward started FHW in May, 2002 to provide consulting services
regarding corporate finance and bank lending. Prior to founding FHW, Mr. Ward
had provided financial consulting and lending brokerage services for nearly 20
years. From 1996 to 1997, he was a consultant with TAIM Investment Company in
Oklahoma City, Oklahoma. From 1978 to 1982, Mr. Ward was the Managing General
Partner of a limited partnership which built and operated franchised Sonic
Drive-In restaurants. Mr. Ward attended Central State University from 1955 to
1957.
Item 7. Financial Statements and Exhibits
(a)-(b) Financial Statements and Pro Forma Financial Information. The
required financial statements and pro forma financial information are filed as a
part of this Current Report on Form 8-K.
(c) Exhibits. The Securities Purchase Agreement is filed at Exhibit 2.1 as
a part of this Current Report on Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVONDALE CAPITAL I CORP.
Dated: September 25, 2002 By: /s/ MARK A. ROBERTSON
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Mark A. Robertson
Secretary/Treasurer
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Exhibit Index
Exhibit No. Description
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2.1 Securities Purchase Agreement dated September 16, 2002.
-3-
Avondale Capital I Corp.
(A Development Stage Company)
Proforma Balance Sheet
December 31, 2001 and 2000
2001 2000
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ASSETS
Cash and cash equivalents 13,735 4,183
Subscriptions receivable 1,750 --
Equipment, net 3,017 --
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TOTAL ASSETS $18,502 4,183
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LIABILITIES
Accrued income taxes payable 785 301
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TOTAL LIABILITIES 785 301
STOCKHOLDERS' EQUITY
Common stock - par value $0.002, 24,000,000
shares authorized; 2,050,000 issued; 2,315,000
proforma shares issued 4,630 3,590
Preferred stock - par value $0.002, 1,000,000
shares authorized; -0- shares issued and outstanding -- --
Additional paid in capital 10,351 590
Deficit accumulated during development stage 2,736 (298)
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TOTAL STOCKHOLDERS' EQUITY 17,717 3,882
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $18,502 $ 4,183
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See notes to proforma financial statements
Avondale Capital I Corp.
(A Development Stage Company)
Proforma Statement of Operations
As of and for the Years Ending December 31, 2001 and 2000
Period from Oct Period from Oct
(inception) through (inception) through
December 31, 2001 December 31, 2000
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REVENUES
Professional Fees 57,188 --
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TOTAL REVENUES 57,188 --
EXPENSES
General and Administrative 21,037
Professional Fees 31,686 298
Depreciation 944
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TOTAL EXPENSES 53,667 298
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INCOME BEFORE TAXES 3,521 (298)
Income Taxes 785 --
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NET INCOME $ 2,736 (298)
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See notes to proforma financial statements
Avondale Capital I Corp.
(A Development Stage Company)
Proforma Statement of Changes in Stockholders' Equity
From inception to December 31, 2001
Deficit
Accumulated
During
Common Stock Paid in Development
Date Shares Amount Capital State
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Issuance of common stock for cash October 31, 2000 1,500,000 $3,000
Sale of stock pursuant to Private Placement
Memorandum dated November 30, 2000 Nov 30-Dec 31, 2000 295,000 590 590
Net Loss (298)
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Balance, December 31, 2000 1,795,000 3,590 590 (298)
Sale of stock pursuant to Private Placement
Memorandum dated November 30, 2000 Jan 1 - Jan 31, 2001 255,000 510 510
Proforma issuance of common stock
to purchase FHW, Inc, December 31, 2001 December 31, 2001 5,000 10 9,251
Proforma issuance of stock subscriptions December 31, 2001 260,000 520
Proforma Net Loss 3,034
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Balance, December 31, 2001 2,315,000 $ 4,630.00 $ 10,351 $ 2,736
====================================================
See notes to proforma financial statements
Avondale Capital I Corp.
(A Development Stage Company)
Proforma Statement of Cash Flows
As of and for the Years Ending December 31, 2001 and 2000
Period from Oct Period from Oct
(inception) through (inception) through
December 31, 2001 December 31, 2000
----------------- -----------------
Cash flows from operating activities:
Net income (loss) 2,736 (298)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 944 --
Increase (decrease) in accounts payable 785 301
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Net cash provided by operating activities 4,465 3
Cash flows from financing activities
Proceeds from issuance of common stock 9,270 4,180
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Net cash provided by financing activities 9,270 4,180
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Net increase (decrease) in cash and cash equivalents 13,735 4,183
Cash and cash equivalents at beginning of period -- --
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Cash and cash equivalents at end of period $ 13,735 $ 4,183
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Supplemental schedule of noncash transactions
Equipment of FHW acquired with common stock $ 3,961
Subscription Receivable 1,750
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Total Non Cash Transactions $ 5,711
Common Stock, December 31, 2001 4,630
Paid in Capital, December 31, 2001 10,351
Cash raised by sale of common stock (5,200)
FHW, Inc. cash at January 1, 2001 (4,070)
Reconcilation of Non Cash Transactions 5,711
Cash raised by sale of common stock 5,200
FHW, Inc. cash at January 1, 2001 4,070
Proceeds from issuance of common stock 9,270
See notes to proforma financial statements
Avondale Capital I Corp.
(A Development Stage Company)
Notes to Proforma Financial Statements
December 31, 2001 and 2000
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES
Avondale Capital I Corp. (the "Company"), a development stage company, was
incorporated on October 31, 2000 under the laws of the State of Oklahoma, to
develop itself through registration under the Securities Act of 1934 and, as a
reporting company, actively seek to purchase, merge or otherwise combine with
other active businesses.
Basis of Accounting
The Company prepares its financial statements using the accrual basis of
accounting. All revenues are recognized when earned and all expenses recognized
when incurred.
Proforma Consolidation
The financial statements have been prepared on a proforma consolidation basis.
The planned purchase by Avondale Capital I, Inc. of FHW, Inc. has been accounted
for as if it had occurred as of December 31, 2001. This transaction has not
occurred as of December 31, 2001. The proforma transaction is a stock for stock
merger with Avondale Capital I, Inc. acquiring 100% of FHW, Inc. for 5,000
shares of Avondale Capital common stock. In addition the shareholders of
Avondale Capital I, Inc. will give 210,000 share of Avondale Capital I common
stock to the stockholders of FHW, Inc. There were no intercompany transactions
that would required elimination.
Proforma Stock Subscription Receivable
The financial statements have been prepared with the proforma assumption that a
planned stock subscription has occurred. The stock subscription is for 260,000
shares of common stock priced at $1,750. This transaction had not occurred as of
December 31, 2001.
Cash and Cash Equivalents
For purposes of the cash flow statement, the Company recognizes all highly
liquid debt instruments with a maturity of three months or less to be a cash
equivalent.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles require management to make estimates and assumptions that
affect the amounts reported and contingent liabilities disclosed in the
financial statements and accompanying notes. Actual results inevitably will
differ from those estimates and such differences may be material to the
financial statements.
Income taxes
Deferred income taxes are provided on temporary differences between the tax
basis of an asset or liability and its reported amount in the financial
statements that will result in taxable or deductible amounts in future years.
Deferred income tax assets or liabilities are determined by applying the
presently enacted tax rates and laws. At December 31, 2001 and 2000, the Company
had no deferred tax assets or liabilities.
NOTE B - STOCK OFFERING
Pursuant to a Private Placement Memorandum dated November 30, 2000, the Company,
in conjunction with Sherwood Capital I, II and III Corp. and Avondale Capital II
and III Corp., offered for sale 500,000 shares of its common stock in 100 units.
Each unit, offered at a price of $120, consists of 30,000 shares of common
stock, 5000 shares in each of the six companies. The Offering was amended to
increase the total number of units to 110. As of December 31, 2000, a total of
59 units had been sold. The remaining 51 units were sold prior to January 24,
2001.
FHW, Inc.
Financial Statements and Auditor's
Report Thereon as of and for the Year Ending
June 30, 2002
HUNTER, ATKINS & RUSSELL, PLC
CERTIFIED PUBLIC ACCOUNTANTS
A.T.(Al) Hunter 5805 North Grand, Suite D
Dennis Atkins Oklahoma City, OK 73118
Casey Russell Mail: P.O. Box 12056
Oklahoma City, OK 73157
Member SEC Telephone: (405) 843-3964
Practice Section Fax: (405) 843-9975
Internet:HARCPAS@HOTMAIL.COM
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Independent Auditor's Report
We have audited the accompanying balance sheet of FHW, Inc. as of June 30, 2002,
and the related statements of income, changes in stockholder's equity and cash
flows for the year 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 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 FHW, Inc. as of June 30, 2002
and the results if its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
July 18, 2002
Page 1
FHW, Inc.
Balance Shee
June 30, 2002
ASSETS
Cash in Bank 3,584
Property and Equipment (Net) 3,017
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TOTAL ASSETS $6,601
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LIABILITIES
Income Taxes Payable 243
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TOTAL LIABILITIES 243
STOCKHOLDERS' EQUITY
Common Stock, par value $1.00,
50,000 shares authorized and
500 shares issued and outstanding 500
Retained Earnings 5,858
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TOTAL STOCKHOLDERS' EQUITY 6,358
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,601
The accompanying notes are an integral part of theses financial statements
Page 2
FHW Inc.
Income Statement
As of and for the Year Ending June 30, 2002
REVENUES
Consulting Fees Earned 69,954
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TOTAL REVENUES 69,954
EXPENSES
Contract Services 30,957
General and Administrative Services 36,826
Depreciation 944
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TOTAL EXPENSES 68,727
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NET INCOME BEFORE INCOME TAXES 1,227
Income Taxes 243
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NET INCOME $ 984
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The accompanying notes are an integral part of theses financial statements
Page 3
FHW, Inc.
Statement of Changes in Stockholders' Equity
As of and for the Year Ending June 30, 2002
Common Stock Retained
Shares Amount Earnings Total
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Balance July 1, 2001 500 500 $ 4,874 5,374
Net Income 984 984
Balance June 30, 2002 500 $ 1,484 $ 4,874 $ 6,358
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The accompanying notes are an integral part of theses financial statements
Page 4
FHW, Inc.
Statement of Cash Flows
As of and for the Year Ending June 30, 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 984
Adjustements to reconcile net income to net cash
provided by operating activities:
Depreciation 944
Increase in Income Taxes Payable 243
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NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 2,171
Cash and Cash Equivalents, Beginning of Year 1413
Cash and Cash Equivalents, End of Year $3,584
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The accompanying notes are an integral part of theses financial statements
Page 5
FHW, Inc.
Notes to Financial Statements
June 30, 2002
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OPERATIONS
FHW, Inc. is a management and financial consulting firm, offering services to
business across the United States.
BASIS OF ACCOUNTING
FHW, Inc. prepares its financial statements on the accrual basis. Revenues are
recorded when earned and expenses are recorded when incurred.
CASH AND CASH EQUIVALENTS
The Company considers all highly-liquid instruments purchased with a maturity of
three months or less to be cash or cash equivalent.
DEPRECIATION
Property and equipment are stated at cost. Depreciation is provided using the
straight-line method of depreciation over the estimated useful lives of the
assets. Depreciation expense for the year ending June 30, 2002 was $944.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting requires management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
INCOME TAXES
Income tax provision consists of the following for the year ended June 30, 2002:
Current tax expense
Federal $174
Oklahoma 69
The Company had no deferred assets or liabilities as of June 30, 2002.
SUBSEQUENT EVENTS
As of June 30, 2002 the Company had agreed to be acquired by another company.
The transaction will take place sometime in fiscal year 2002/2003
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