UNITED STATES
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 THE FISCAL YEAR ENDED 1998
0-13738
----------------------
Commission File Number
THE SAINT JAMES COMPANY
-----------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1426581
- ------------------------ -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
1104 Nueces Street
------------------
Austin, Texas 78701-2128
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(512) 671-3858
--------------
(Address and Telephone Number of Principal Executive Offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.001 par value.
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
The registrant has included disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K. [ ] yes [ X ] no
The aggregate market value of voting stock held by non-affiliates of
the Registrant as of sixty (60) days before the date of filing was $0.
The number of shares of Registrant's Common Stock outstanding as of
December 31, 1998, was 999,057.
Documents incorporated by reference: None
Total Number of Pages: 25
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Exhibit Index on Page: 14
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PART 1
Item 1. Business
Radiation Disposal Systems, Inc., the original company, was
incorporated in North Carolina on January 10, 1984, under the name Chem-Waste
Corporation. In November 1999, the Company was purchased by The Saint James
Company for 20 million shares of stock in The Saint James Company.
The Company's principal purpose is to design, manufacture, sell and
service equipment and systems for the treatment of contaminated insoluble
organic materials. Radiation Disposal Systems ("RDS") held a patented process
for reducing the volume of contaminated insoluble organic solid resin materials.
RDS developed and marketed machines to utilize the patented process ("Process")
to treat a variety of radioactive waste, and to continue development work in
connection with the Process and machines to improve and expand their commercial
applications and uses.
RDS also developed waste and water treatment technologies ("Ozone
Technologies") to treat nonradioactive wastes and water using the basic
component of the Process, ozone, in conjunction with, in some applications, the
light produced by high intensity discharge ("HID") lamps. The Ozone Technologies
may be used to treat various types of waste. In connection with any application
of the Ozone Technologies, a system may be custom-designed and fabricated to
meet the particular needs of the purchaser.
RDS has been unsuccessful in marketing either the Process or the Ozone
Technologies. The Company never generated any significant revenues. During 1992,
the Company substantially ceased operations and terminated all but two of its
employees. The Company had very limited operations consisting, in 1997, of
transfer agent activities resulting in revenues of $2,087. In 1998, the Company
had basically no operations.
The Saint James Company (the "Company") incorporated in Delaware on
November 19, 1998, purchased all of the outstanding shares of RDS for 20 million
shares of the Company's stock. The Saint James Company was the surviving entity.
2
Narrative Description of Business
GENERALLY. The Company has not marketed either the Process or the Ozone
Technologies.
COMPETITION. The Company attributes its inability to market the Process and the
Ozone Technology to the fact that the use of ozone as a means of waste or water
treatment is not a widely accepted technology. Producers use other means of
waste disposal and/or treatment such as chemical and biological treatment,
burial, and in certain cases, incineration. Therefore, the market for the
Process and Ozone Technology has not developed and, in the opinion of
Management, may never develop.
There are a number of other firms offering various applications of
ozone technology. Most of these firms have been in business for a longer period
of time, are better established and better capitalized. Management is aware of
at lease two other companies, Ultrox International ("Ultrox") and Para
Oxidation, that offer waste treatment systems which utilize ozone, hydrogen
peroxide and conventional ultraviolet lights to treat water and various types of
waste, including radioactive wastes and other wastes. Ultrox, which has been in
existence since 1983, has been actively marketing and selling its waste
treatment system for several years. Any such waste treatment system is likely to
compete directly with the Ozone Technologies and/or the Process.
Management is aware of several firms including, but not limited to,
Ultrox International, Para Oxidation, PCI Ozone Corporation, Griffin Technics,
Inc., Henkel Corporation and the successor company to Brown-Bovari, Inc., which
would compete with any system the Company might market.
Within this limited market, given its historical lack of sales, the
Company is of the opinion that its market position is negligible or nonexistent.
MATERIAL AND PRODUCTION. The following discussion of materials and production
must be read in light of the fact that the Company has virtually no operations.
The Company does not employ, nor does it intend to employ, sufficient personnel
to produce any systems or machines which the Company could sell or lease. While
there are a number of outside fabricators that have the capabilities to
construct and assemble the systems and machines, the absence of sales renders
issues of production capability moot.
The Company does not presently inventory any equipment or component
parts. Although this dependence on suppliers for equipment and components could
lead to significant production delays, the absence of sales renders concerns
about delays moot.
The Company gained certain technology regarding the generation of ozone
pursuant to an agreement it entered into with Pillar Technologies, Inc.,
("Pillar") in 1988. Pillar is presently the only source for the power supply
used in conjunction with the ozone generator in the systems and machines. No
purchases were made in 1998.
3
The Company entered into an agreement in November, 1989, pursuant to
which it received a license to use certain technology relating to the materials
used in and the construction of an essential component of the ozone generator.
PATENTS. On March 5, 1984, the Company obtained, by assignment from Gram
Research & Development, Co., Inc., ("Gram") all Gram's interest in and to a
patented process for a method reducing the volume of contaminated insoluble
organic solid resin materials, and any U.S. or foreign letters patent issued
therefor. The Process is based upon the process described in this Patent. The
U.S. Patent and Trademark Office issued U.S. Patent No. 4,437,999 (the
"Patent"), dated March 20, 1984, for such patented process entitled "Method of
Treating Contaminated Insoluble Organic Solid Material," naming Sherman T. Mayne
as the inventor and Gram as the assignee. An assignment of such patented process
and the aforedescribed U.S. Letters Patent from Gram to the Company was recorded
in the U.S. Patent and Trademark Office on March 29, 1984. The Patent expires
March 20, 2001. During the year ended December 1995, the Company forwent the
payment of applicable annual renewal fees for the Patent because of the
substantial depletion of its financial resources, thereby allowing the Patent to
lapse.
Due to insufficient funds, the Company forwent payment of the
applicable yearly renewal fees on its European, Australian and Norwegian
patents, all of which lapsed on March 19, 1991. The Company's Finnish and
Japanese patent applications were abandoned on August 1990, and March, 1991,
respectively.
In September 1986, the Canadian Patent Office granted the Company a
patent for the Process, as described in the Patent, which expires September 16,
2003. The Company does not know if this Canadian patent remains in effect.
SEASONALITY. The Company's business is not seasonal in nature.
WORKING CAPITAL ITEMS, CUSTOMER DEPENDENCE, BACK LOG ORDERS. Because the
Company had no sales or other distributions of the systems and machines, in
1998, customer dependence and any backlog orders are not germane to the
Company's business. The Company maintains no inventory. See "Financial
Statements and Supplementary Data."
RESEARCH AND DEVELOPMENT. During the year ended December 31, 1998, the Company
incurred no expenses related to company-sponsored research and development.
ENVIRONMENTAL COMPLIANCE. Without sales of current systems designed to apply
the Ozone Technologies or machines designed to apply the Process, it is
difficult to evaluate the material effects of compliance with applicable
regulations of the various federal, state and local agencies, which have been
enacted or adopted regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment, will have upon the
capital expenditures, earnings and competitive position of the Company. If the
Company were ever to make such sales, which Management views as unlikely,
environmental compliance could become a significant issue for the Company to
overcome in achieving successful operations.
4
To date, the systems designed to apply the Ozone Technologies have been
distributed through the sale or lease thereof. Under this plan of distribution,
it is anticipated that it will be primarily the purchasers and/or users of the
systems, and not the Company, that will be subject to environmental regulation
in connection with the use thereof. There is no guarantee that Management's
belief is correct.
With regard to the machines designed to apply the Process, compliance
with any federal, state, and local governmental regulations may be so burdensome
for the Company and/or users of such machines as to have a material adverse
effect upon the viability of the Process or will render the use in a commercial
setting of such machines unfeasible or impossible. It is possible, though not
anticipated, that certain of the radioactive materials remaining after future
government regulations, be classified as "intermediate level" or "high level"
radioactive materials, the disposal of which is highly regulated, and could be
sufficiently costly as to diminish or offset any economic benefit of the
reduction of the radioactive wastes by treatment with the Process. In this
event, the Process would be uneconomical and therefore unmarketable.
It is possible that the Company will have to modify the design of the
system and/or machines for the Ozone Technologies or the Process in order for
the users thereof to meet regulatory standards. The Company is unable to
currently assess the extent or costs of any such modifications. The Company has
insufficient assets to fund any modifications.
The Company anticipates that it will have no material capital
expenditures for environmental control facilities for the remainder of its
current fiscal year. No assurance can be given that government regulations will
not be promulgated in the future which will have a material adverse effect on
the operations of the Company's business.
EMPLOYEES. Rudy De La Garza is the President and Chief Executive Officer of
the Company. Wayne Gronquist is the Executive Vice President and Secretary of
the Company. Neither party receives any compensation for serving as officers of
the Company or otherwise.
FILINGS. The Company files quarterly and annual reports with the Securities
Exchange Commission.
The public may read and copy any materials the Company files with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. The public may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet web site that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC. The
Internet web site for the SEC is http://www.sec.gov. The Company does not
maintain an Internet web site at this time.
5
REPORTS. The Company will send audited yearly financial reports, completed by
an independent public or certified public accountant, to the shareholders of the
Company.
Item 2. Properties
The Company has no owned or leased property.
Item 3. Legal Proceedings
There are no material pending legal proceedings to which the Company is
a party or of which any of the Company's property is the subject. However, there
are two outstanding judgments against the Company.
Thomas Publishing Co. filed a lawsuit against the Company for
collection of a past due account in the total of $3,265, in the District Court
of Western North Carolina. On May 5, 1995, the Company settled the lawsuit by
signing a Consent Judgment providing that Thomas Publishing Co. have and recover
Judgment against the Company in the sum of $3,265, plus interest at 18% per
annum and collection cost of $1,179 plus interest of 8% per annum from the date
of Judgment until paid in full, and court costs. Because the Company did not
have the financial resources to pay this Judgment, it was not paid as of
December 31, 1998.
McKinney & Moore, Inc., filed a lawsuit against the Company for
collection of a past due account in the total of $3,802, in the District Court
of Henderson County, Texas. On February 25, 1983, McKinney & Moore, Inc.,
received a judgment to recover the debt, attorney fees of $1,250, prejudgment
interest of $211, plus interest at 10% per annum from the date of Judgment until
paid in full. Because the Company did not have the financial resources to pay
this Judgment, it was not paid as of December 31, 1998.
Item 4. Submission of Matters to a Vote of Security Holders
On November 19, 1998, an annual meeting of shareholders was held. The
following matters were decided by the shareholders of the Company:
1. Two directors were elected, Rudy De La Garza and Wayne Gronquist.
No other directors term of office continued after the election.
The number of votes for the election of Rudy De La Garza as a
director are 15,263,950 in favor and 750 against. The number of
votes for the election of Wayne Gronquist as a director are
15,263,950 in favor and 750 against.
2. Passage of the proposal to amend the Company's Certificate of
Incorporation to effect a change of the Company's name from
Radiation Disposal Systems, Inc., to The Saint James Company. The
number of votes in favor of the change are 15,263,200 and 750
against.
6
3. Passage of the proposal to amend the Company's Certificate of
Incorporation to increase the authorized number of shares of
Common Stock from 20 million to 50 million. The number of votes in
favor of the increase in shares are 15,257,117 and 6,833 against.
4. Passage of the proposal to reverse-split the Company's outstanding
shares of Common Stock on a 20 for 1 basis, 20 outstanding shares
for 1 new share. The number of votes in favor of the reverse-split
of shares are 15,252,189 for and 2,533 against.
5. Passage of the proposal to authorize a change of the Company's
domicile (state of incorporation) from North Carolina to Delaware.
The number of votes in favor of the change in domicile are
15,261,146 and 2,533 against.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's Common Stock does not currently trade on the
over-the-counter market or any national exchange. Due to lack of trading, no bid
and asked closing prices per share for the Company's Common Stock for any
quarterly period in 1998 are available.
As of December 31, 1998, the Company had 999,057 shares outstanding of
common stock and approximately 1,095 shareholders of record. (The Company had
the option to repurchase a number of shares of the Company's stock held by three
individuals, whose repurchase options expired on June 30, 1990. In June 1990,
prior to the expiration of the repurchase option, the Company exercised its
option to repurchase with regard to a total of 34,418 shares of stock held by
these three individuals. As of the date hereof, the three individuals have not
executed all the necessary documents to effect the transfer of the shares to the
Company and consequently these shares remain outstanding.)
The Company has not been in a financial position to pay dividends since
its inception and because of the Company's continuing losses from operations and
the substantial depletion of its cash reserves, the Company has no plans to pay
dividends in the future.
There are no securities of the Company sold by the Company within the
past three years, which were not registered under the Securities Act.
7
Item 6. Selected Financial Data
AT AND FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Selected 1998 1997 1996 1995 1994
Statement of
Income
(Loss) Data:
- --------------------------------------------------------------------------------
Sales $ 0 $ 0 $ 0 $ $
- ------------------- ---------- ---------- ---------- ---------- ----------
Cost of
Sales 0 0 0
- ------------------- ---------- ---------- ---------- ---------- ----------
Engineering,
research and
development
expenses 0 0 2,345 2,965
- ------------------- ---------- ---------- ---------- ---------- ----------
Adminis-
tative
Expenses 1116 4,568 7,017 194,643 194,283
- ------------------- ---------- ---------- ---------- ---------- ----------
Professional
Fees 0 0 0 4,005
- ------------------- ---------- ---------- ---------- ---------- ----------
Office
Expense 2,512 3,962 9,083
- ------------------- ---------- ---------- ---------- ---------- ----------
Patent
Expense 0 0 0 78,804
- ------------------- ---------- ---------- ---------- ---------- ----------
Bad Debt
Expense 0 0 0 24,096
- ------------------- ---------- ---------- ---------- ---------- ----------
Income
(loss) from
operations (4,568) (9,362) (197,608) (207,338)
- ------------------- ---------- ---------- ---------- ---------- ----------
Interest and
other income 3,096 5,013 938,806 9,477
- ------------------- ---------- ---------- ---------- ---------- ----------
Net income
(loss) $ (1116) $ (1,472) $ (4,349) $ 741,198 $ (197,861)
- ------------------- ---------- ---------- ---------- ---------- ----------
Weighted
average
shares of
common
stock 999,057 9,977,495 9,977,495 9,977,495 9,977,495
- ------------------- ---------- ---------- ---------- ---------- ----------
Net income
(loss) per
share $ (.00) $ (.00) $ .07 $ (.02)
- ------------------- ---------- ---------- ---------- ---------- ----------
Selected Balance
Sheet Data:
- --------------------------------------------------------------------------------
Current
Assets $ 18,665 $ 159 $ 193 $ 17 $ 24,638
- ------------------- ---------- ---------- ---------- ---------- ----------
Current
Liabilities $ 19,502 74,825 73,387 71,207 918,796
- ------------------- ---------- ---------- ---------- ---------- ----------
Working
Capital
(deficit) $ (74,666) $ (73,194) $ (71,190) $ (894,158)
- ------------------- ---------- ---------- ---------- ---------- ----------
Total Assets 0 159 193 2,362 108,753
- ------------------- ---------- ---------- ---------- ---------- ----------
Stockholders
Equity (18,664.48) 74,666 73,194 68,845 (810,043)
- ------------------- ---------- ---------- ---------- ---------- ----------
Cash
Dividends
declared on
Common
Shares 0 0 0 0 0
- ------------------- ---------- ---------- ---------- ---------- ----------
8
The foregoing chart includes 1997 financial statements which are
unaudited and internally generated.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company had no net sales for the years ended December 31, 1998,
1997, 1996, 1995 or 1994. The figures for years 1994, 1995 and 1996 are
incorporated by reference from the Company's 1997 annual report filed with the
Securities and Exchange Commission.
Historically, the Company has had no sales of equipment using the
Process, and few sales of machines and equipment utilizing the Ozone
Technologies. To date, the Company has been unsuccessful in marketing machines
and equipment that utilize the Process or Ozone Technologies.
The Company has not been able to generate sales of its products, and
consequently, the Company had incurred substantial losses and continues to incur
losses disregarding cancellation of debt income. The Company experienced a net
loss of $1116 for the year ended December 31 1998, $1,492 for 1997, $4,349 for
1996, a net income of $741,198 for 1995 and a net loss of $197,861 for 1994.
For the year ended December 31, 1998, and 1997, the Company had no
engineering, research and development expenses compared to $2,345 for 1996 and
$2,965 for 1995.
For the year ended December 31, 1998, the Company incurred
administrative expenses of $1116, compared to $4,568 for 1997, $7,017 for 1996,
$194,643 for 1995 and $194,283 for 1994. The significant components of 1998
administrative expenses together with comparative data where significant change
has occurred in relation to prior years, include the following:
(a) The Company had no salary expenses for its officers or directors. In
1997, the Company had no salary expense pursuant to an employment
agreement the Company then held with Albert D. Kane and Manuel E. Kane
as officers of the Company, who both were stockholders and Directors
of the Company for 1997 and 1996. Pursuant to their to their
employment contracts, the officers were entitled to each receive
annual salaries of $50,000. In December, 1995, the officers agreed to
perform the limited duties that the Company requires without
compensation until such time as the Company had sufficient financial
resources to pay salaries. In December, 1995, the officers forgave all
accrued salaries owed them by the Company because of the Company's
depleted financial resources and the Company's uncertain future. In
1995, the Company recognized $579,167 in cancellation of debt income
as a result of this forgiveness of debt.
9
(b) The Company had no professional fees for 1998, 1997 or 1996, compared
to $4,005 for 1995.
(c) Office expense of $1,116 for 1998, compared to $2,512 for 1997, $3,962
for 1996 and $9,083 for 1995. This caused a decrease of $1,396
compared to 1997, $2,846 to 1996 and $7,967 compared to 1995.
(d) The Company had no amortization of patent expense for 1998, 1997 and
1996 compared to $78,804 for 1995. During 1995, the Company forwent
the payment of applicable annual renewal fees for the Patent because
of the substantial depletion of its financial resources, thereby
allowing the Patent to lapse. The Company recognized the remaining
unamortized cost ($78,804) as expense in 1995.
(e) The Company had no bad debt expense for 1998, 1997, and 1996 compared
to $24,096 for 1995. In 1995, the Company was unable to collect the
outstanding debt due it from Chandler County, a municipality in Texas,
and recognized bad debt expense.
The Company had $1,116 in income for 1998 compared to $3,096 for the
year ended December 31, 1997, $5,013 for 1996, $938,806 for 1995 and $9,477 for
1994. The significant components of 1998 other income together with comparative
data where significant change has occurred in relation to prior years, include
the following:
(a) The Company had no income from replacement part sales, machinery
rental and treatability testing activities in 1998 and 1997, compared
to $995 for 1996 and $12,669 for 1995.
(b) The Company had interest expense of $1,116 for 1998, compared to
$4,596 for 1997, $4,373 in 1996 and $6,835 in 1995. During 1997, the
Company exhausted its cash reserves and was forced to borrow funds
from its two officers to finance it working capital needs. See, Item
12 - Financial Condition and Liquidity." In 1998, 1997, 1996, and
1995, the Company incurred interest expense involved with judgments
against it which have not been paid. See, Item 3 - Legal Proceedings.
10
(c) Cancellation of debt income of $0 compared to $5,605 for 1997, $7,397
for 1996 and $932,972 for 1995. During the years ended December 31,
1998, 1997, 1996, 1995, the time limit allowed by the Statute of
Limitations for vendors to collect certain of the Company's trade
payable expired. Because the Company does not have the financial
resources to pay these debts and the aforementioned Statute of
Limitations bars their collection, the Company included these amounts
in cancellation of debt income. For the years ended December 31, 1998,
1997, 1996 and 1995 , the amounts of $0, $5,605, $7,397 and $147,923,
respectively were included in cancellation of debt income.
Financial Condition and Liquidity
The Company has no cash assets. The Company's cash decreased $159 from
the year ended December 31, 1997, $193 from 1996, $17 from 1995 and $24,638 from
1994. The 1998 change in cash was due to operating expenses. The 1998 change in
cash was affected by the following: payment of consulting fees for removal of
waste, transfer agent fees and bad debt.
The Company is unable to currently estimate the cost of any necessary
compliance with applicable governmental regulations. The Company does not
anticipate spending money for hiring employees. There have been no significant
expenditures for property or other equipment or assets since January 1, 1998.
During 1997, the Company continued to take steps to reduce its
operating expenses and to severely curtail its operations in an attempt to
conserve its remaining limited financial resources. However, at December 31,
1997, the Company's financial resources were almost completely exhausted.
Because of its extremely weak financial condition, the Company did not hold an
annual meeting of shareholders in 1997 because the estimated cost of that
meeting would exhaust its remaining financial resources. In addition, the
Company did not include audited financial statement in its 1997 Form 10-K
because the estimated expense of such compliance with the Securities and
Exchange Act of 1934 would exhaust the Company's remaining financial resources
for that year. The Company only has internally generated and unaudited financial
statements in the 1997 Form 10-K.
In 1998, the Company has suffered the same economic hardships as 1997.
Management plans for the Company either to change the principal business of the
Corporation, merge with a financially stable company and/or sell the majority of
the Corporation's stock. Management does not know at this time what type of
business the Corporation will undertake in the future or the entity that will
purchase the Corporation's shares in the event of sale. The Company has audited
financial statements for 1998, prepared by an independent certified public
accountant. The Company held an annual meeting of shareholders and will send out
audited financial statements to the shareholders of the Company.
11
Capital Resources
Subsequent to December 31, 1998, the Company has no expenditures for
the purchase of materials, machinery and other testing equipment.
Item 7a. Quantitative and Qualitative Disclosures about Market Risk.
At this time, Management does not know the business path for the
Company for the next 12 months. Based on the lack of sales during the past three
years, Management does not believe that the waste disposal system is marketable.
Management does not foresee any changes in the marketplace that would create
demand for the waste disposal system. Management is currently considering
various restructuring techniques to maximize shareholder profits, including a
possible sale of the Company's stock or a merger, if a suitable merger candidate
is found. At this point, the Company's future business remains uncertain and
Management cannot make adequate disclosures about market risk until necessary
business decisions are made.
Item 8. Supplementary Financial Information
The information required by this Item 8 is referenced in Item 6 and is
included in pages 17-25 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Because of the poor financial condition of the Company, no accountant
was employed to prepare financial statements in 1997 and 1998. In June 1999, the
Company hired Barry L. Friedman, P.C., 1582 Tulita Drive, Las Vegas, NV 89123,
to perform audited accounting for 1998 and 1999. Mr. Friedman, a certified
public accountant, conducts audits in accordance with generally accepted
accounting standards. Mr. Friedman relies on oral information provided by
Management of the Company in the preparation of audits.
Item 10. Directors and Executive Officers of the Registrant
All Directors are elected each year by the shareholders of the Company
at its annual meeting of shareholders normally held in June. Each of the
Directors holds office until his death, resignation, retirement, removal
disqualification, or until his successor is elected and qualified.
The Officers and Executive Officers of the Company, as of December 31,
1998, are as follows:
Name Term of Office Age Position
- ---------------- -------------- --- --------
Rudy De La Garza 1998 52 President,
Chief Executive
Officer,
Director
Wayne Gronquist 1998 57 Executive Vice
President,
Secretary,
Director
12
Rudy De La Garza. Mr. De La Garza has over 25 years experience in corporate
structuring and management for both private and publicly held companies.
From 1993 to present, Mr. De La Garza has devoted his efforts and time
to consulting publicly held companies, which have lost business and market
value. He restructures the public company to recreate the shell in a more
favorable form for presentation to an emerging private company with net tangible
assets.
Wayne Gronquist. Mr. Gronquist is an attorney with 26 years experience as
corporate counsel and advisor for various private and publicly held
corporations, both domestic and foreign. During this period, he has focused his
practice on corporate structuring, business, financial, family and estate
planning.
Item 11. Executive Compensation
The following table sets forth certain information concerning the
compensation for the Directors and Executive Officers of the Company for the
year ended December 31, 1998:
Name of Individual or
Number in Group Capacities in which Served Cash Compensation
- ------------------------ -------------------------- -----------------
All Executive Officers
and Directors as a group All capacities $ 0
None of the Company's executive officers received cash compensation
in excess of $60,000 for the year ended December 31, 1998 or 1997.
Other than as set forth herein, no remuneration of any nature has been
paid for or on account of the services rendered by a Director in such capacity.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of December 31, 1998, the number of
shares of the Company's outstanding Common Stock owned beneficially by (i) each
person known to the Company to be the beneficial owner of more than 5% of such
stock, (ii) each Director of the Company and (iii) each Executive Officer.
13
- --------------------------------------------------------------------------------
Name and Address of Amount and Nature of Percentage of Outstanding
Beneficial Owner Beneficial Relationship Common Stock
- ------------------------- ----------------------- --------------------------
JonRuco Company 250,000 25.008%
8309 Priest River Drive
Round Rock, Texas 78681
- ------------------------- ----------------------- --------------------------
Wayne Gronquist, Trustee 250,000 25,0028%
1104 Nueces Street
Austin, Texas 78701-2128
- ------------------------- ----------------------- --------------------------
Manuel E. Kane 100,000 10.011%
4252 Woodglen Lane
Chalotte, NC 28226
- ------------------------- ----------------------- --------------------------
Albert D. Kane 100,000 10.011%
391 Hartsborn Drive
Short Hills, NJ 07078
- ------------------------- ----------------------- --------------------------
Steven M. Kane 100,755 10.0868%
4013 Walnut Clay Road
Austin, Texas 78731-3934
- ------------------------- ----------------------- --------------------------
Seth Kane 62,253 6.2322%
23 Circle Drive
Belmont, NC 28012
- ------------------------- ----------------------- --------------------------
Ross A. Kane 62,253 6.2322%
6115 Hickory Forest Drive
Charlotte, NC 28277
- ------------------------- ----------------------- --------------------------
TOTAL 74.559%
Item 13. Certain Relationship and Related Transactions
There are no transactions, to which the Company is to be a party, with
directors, officers or security holders owning more than five percent of any
class or a family member of any of the foregoing.
Item 14. Exhibits, Financial Statements, Schedules and Reports.
1. Financial Statements. The following Financial Statements are filed
herewith as required pursuant to Part I, Item 8 of this Form 10-K:
- --------------------------------------------------------------------------------
DOCUMENT PAGE
- -------------------------------------- ------------------------
Report of Independent Certified Public
Accountants 16
- -------------------------------------- ------------------------
Balance Sheet December 31, 1998 17
- -------------------------------------- ------------------------
Income Statement December 31, 1998 19
- -------------------------------------- ------------------------
Cash Flow Statement December 31, 1998 20
- -------------------------------------- ------------------------
Retained Earnings December 31, 1998 21
- -------------------------------------- ------------------------
Notes to Financial Statements 22
- --------------------------------------------------------------------------------
14
2. Exhibits. The following exhibits are filed herewith pursuant to the
requirements of paragraph (c) of this Item 14 and Item 601 of
Regulation S-K:
- --------------------------------------------------------------------------------
DOCUMENT EXHIBIT NUMBER
- -------------------------------------- ------------------------
Articles of Incorporation & Amendments 3.1
- -------------------------------------- ------------------------
Bylaws as Amended through December 31,
1998 3.2
- -------------------------------------- ------------------------
Note of Annual Meeting 20.1
- -------------------------------------- ------------------------
Proxy Statement for Annual Meeting of
Stockholders 20.2
- -------------------------------------- ------------------------
Financial Data Schedule 27
- --------------------------------------------------------------------------------
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.
The Saint James Company
/s/ Wayne Gronquist 01/07/00
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Wayne Gronquist Date
President, Secretary, Director
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To the Board of Directors and Stockholders of
THE SAINT JAMES COMPANY
We have audited the accompanying balance sheets of The Saint James Company, (a
corporation) at December 31, 1998; March 31, 1999; June 30, 1999, and the
related statements of income, retained earnings, and cash flows for the one
year, three months, and six months 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 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 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 the Saint James Company at
December 31, 1998, March 31, 1999, June 30, 1999, and the results of its
operation and its cash flows for the one year and three months and six months
then ended in conformity with generally accepted accounting principles.
/s/ Barry Friedman
- ----------------------
Barry Friedman
Las Vegas, Nevada
July 19, 1999
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THE SAINT JAMES COMPANY
Balance Sheet
- ------------------------------------------ ------------------------------
ASSETS DECEMBER 31, 1998
- ------------------------------------------ ------------------------------
Current Assets
Property, Plant and Equipment 0
Total Current Assets 0
Total Assets 0
LIABILITIES AND
SHAREHOLDERS EQUITY
Current Liabilities
Accrued Interest Payable 1,115.67
Total Current Liabilities 1,115.67
Long Term Liabilities
Interest Payable 6,392.06
Judgments Payable 11,156.75
Total Long Term Liabilities 17,548.81
Total Liabilities 18,664.48
SHAREHOLDER'S EQUITY
Common Stock 9,977.00
Paid-in Capital in Excess of Par Value 3,451,590.00
Sub-Total 3,451,590.00
Retained Earnings
Retained Earnings, Restricted (11,156.75)
Retained Earnings (Deficit) (3,469,074.73)
Total Retained Earnings (3,480,231.48)
Total Shareholder's Equity 0
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THE SAINT JAMES COMPANY
Income Statement
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Year Ended December 31, 1998
- ------------------------------------------ ------------------------------
REVENUES 0
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OPERATING EXPENSES 1,115.67
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Interest Expense 1,115.67
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Total Operating Expense 1,115.67
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Net Income (Loss) (1,115.67)
- ------------------------------------------ ------------------------------
Earnings Per Share Nil
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THE SAINT JAMES COMPANY
Income Statement
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Year Ended December 31, 1998
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CASH FLOWS FROM OPERATING
ACTIVITIES
- ------------------------------------------ ------------------------------
Net Income (Loss) (1,115.67)
- ------------------------------------------ ------------------------------
Adjustment to reconcile net income
(loss) to net cash provided by
operating activities 0
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Cash Flow Provided from Operating
Activities (1,115.67)
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CASH FLOWS FROM INVESTING ACTIVITIES 0
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CASH FLOWS FROM FINANCING
ACTIVITIES
- ------------------------------------------ ------------------------------
Interest Payable 1,115.67
- ------------------------------------------ ------------------------------
Cash Flows Provided from Financing
Activities 0
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Net Increase (Decrease) to Cash 0
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Cash. Beginning of Period 0
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Cash. End of Period 0
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THE SAINT JAMES COMPANY
Retained Earnings Statement
- -------------------------------------------------------------------------
Year Ended December 31, 1998
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Balance Begining of Period (3,467,959.06)
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Before Restricted (3,467,959.06)
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Net Income (Loss) (1,115.67)
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Sub-total (3,469,074.73)
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Retained Earnings Restricted (11,156.75)
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Balance End of Period (3,480,231.48)
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THE SAINT JAMES COMPANY
Notes to Financial Statements
SEE AUDITOR'S REPORT
Note A: Summary of Significant Accounting Policies
Nature of Operations
--------------------
The principal purpose of the company is to design, manufacture, sell
and service equipment and systems for the treatment of contaminated insoluble
organic solid materials. The Company has developed and marketed ozone
technologies.
Property, Plant and Equipment
-----------------------------
Property, plant and equipment have been recorded at cost and/or
development cost. Components which were no longer used in testing and marketing
processes were removed from property, plant and equipment and written off as a
loss.
Depreciation
------------
Depreciation was computed on the straight line method for financial
statement purposes and the accelerated method for income tax purposes over the
estimated useful lives of the assets.
Research and Development Costs
------------------------------
Research and development costs were expensed as incurred.
Income Taxes
------------
No provision for income taxes, either accrued or deferred, have been
reported in the financial statements because the Company has incurred only net
operating losses.
Earnings (losses) Per Share
---------------------------
The weighted average of shares outstanding method is used in
calculating earnings (losses) per share.
Note B: Organization of Company
Chem-Waste Corporation was incorporated on January 10, 1984, under the
laws of the State of North Carolina. The charter authorized 20,000,000 share of
common stock with a par value of $1.00 per share.
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On July 19, 1984, the name of the Company was changed to Radiation
Disposal Systems, Inc., by amendment to the Charter of Incorporation in the
State of North Carolina.
On September, 13, 1984, the Company was authorized by amendment to the
Articles of Incorporation 1,500,000 preferred stock, nonvoting, noncumulative,
$.50 par value per share, 10% noncumulative dividend, callable at 105% of par
value, and convertible into common stock on a share for share basis. The
amendment of articles granted the issuance of warrants.
On October 9, 1984, the Company was authorized by amendment to the
Articles of Incorporation to change the par value of the common stock from $1.00
per share to $.001 per share.
In January 1985, the Company conducted a public offering of 2,700,000
common shares for $1.25 per share. The underwriter was given warrants which are
exercisable over a four year period beginning June 1986, to purchase 270,000
common stock shares at $1.50 per share.
In June 1987, 100,000 preferred stock shares were converted to common
stock shares on a share for share basis.
In August 1987, 550,000 preferred stock shares were converted to common
stock shares on a share for share basis.
On July 1, 1988, the articles were amended for denial of presumptive
rights, "The Shareholders of the Corporation shall have no presumptive rights to
acquire additional or treasury shares of the Corporation."
In July and September 1988, the warrants were exercised at $1.50 per
share for common stock.
On July 14, 1990, the Articles of Incorporation of the Company were
amended by adding a new Article designed as Article X, to read as follows:
Article X
To the fullest extent permitted by the North Carolina
Business Corporation Act as it exists or may hereafter be
amended, a director of the Company shall not be personally
liable to the Company, its shareholders or otherwise for
monetary damages for breach of his duty as a director. Any
repeal or modification of this Article X shall be
prospective only and shall not adversely affect any
limitation on the personal liability of a director of the
Company existing at the time of such repeal of modification.
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On September 21, 1998, 10,000,000 shares of Radiation Disposal Systems,
Inc., were traded for 1,000,000 authorized shares of Asset Technology
International, Inc. The shares of Technology International, Inc., were canceled.
At the time of the stock exchange, Technology International, Inc., had no
assets, liabilities or capital. The company was completely dormant.
On October 13, 1999, The Saint James Company was incorporated under the
laws of the State of Delaware. The purpose of the Corporation shall be to engage
in any lawful activities.
In November 1998, Radiation Disposal Systems, Inc., exchanged all of
its outstanding shares with The Saint James Company. The effect is to change the
name of Radiation Disposal Systems, Inc., into The Saint James Company, and to
change the domicile from the State of North Carolina to the State of Delaware.
On November 19, 1998, Radiation Disposal Systems, Inc., was granted an
increase from 20,000,000 common shares par value $.001 authorized to 50,000,000
common shares when authorized par value $.001.
On November 19, 1998, the Articles of Incorporation were amended to
allow for a 20-1 reverse split of the common stock for Radiation Disposal
Systems, Inc.
Note C: Accrued Interest Payable and Interest Payable
The Company has two judgments against it (See Note D) that require
interest to be paid on those judgments. The accrued interest payable represents
the current year or period interest owed. The interest payable represents
interest owed from prior years that has not been paid.
Note D: Judgments Payable (Litigation)
Thomas Publishing Company holds a consent judgment dated May 5,
1995. The date of the interest as stated in the judgment is to start December
13, 1993.
Sum of Judgment, 18% per annum $ 3,265.00
Interest prior to December 13, 1993 $ 1,450.00
Collection cost, 8% per annum $ 1,178.78
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Total $ 5,893.78
McKinney & Moore, Inc., on February 13, 1993, received a judgment
against the Company.
Judgment, 10% per annum $ 3,802.00
Attorney's fees, 10% per annum $ 1,250.00
Prejudgment, 10% per annum $ 211.00
Total $ 5,263.00
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Total of judgments $11,156.78
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Note E: Capital Stock
December 31, 1998
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Preferred Stock, $.01
par value per share,
500,000 shares
authorized. No shares
issued and outstanding. 0
- ------------------------------- ----------------------------------
Common Stock,
authorized 50,000,000
shares with par value
of $.001 per share,
9,977,495 common
shares issued and
outstanding $9,977
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Note F: Retained Earnings Restricted
Retained earnings restricted represents the total judgments held
against the Company. See Note D.
Note G: Prior Period Adjustments
Prior period adjustments as shown on the statement of cash flows and
the retained earnings statement represents changes to financial statements
provided by the Company for audit.
Note H: Going Concern
As shown on the financial statements, the Company has incurred losses
of over $3.4 million from inception to December 31,1998. The ability of the
Company to continue as a going concern is dependent upon the success of the plan
to raise capital by a merger with another profitable company. The financial
statements do not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.
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