UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15-(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2002
Commission File Number 0-29507
TULVINE SYSTEMS, INC.
(Exact name of registrant as specified in the charter)
Delaware 52-2102141
(State or other jurisdiction of incorporation) (I.R.S. Employer Identification
or organization) Number)
5525 NORTH MACARTHUR BLVD., SUITE 615, IRVING, TEXAS 75038
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: 972-894-9040
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.0001 par value
(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 past 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 __
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
The issuer's revenues for the year ended December 31, 2002 were $0.
As of March 31, 2003 there were 1,000,000 shares of common stock outstanding,
par value $.0001 per share. The aggregate market value of the common stock of
the registrant, held by non-affiliates of the registrant, on March 31, 2003, was
$0.
DOCUMENTS INCORPORATED BY REFERENCE: No documents are incorporated by reference
into this Report except those Exhibits so incorporated as set forth in the
Exhibit index.
Transitional Small Business Disclosure Format: Yes __ No X
-----------
1
TABLE OF CONTENTS
Part I
Item 1. Business 3
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Matters 7
Part II
Item 5. Market for a Common Equity and Related Stockholders Matters 7
Item 6. Management's Discussion and Analysis 8
Item 7. Financial Statements 10
Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure 18
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act 18
Item 10. Executive Compensation 19
Item 11. Security Ownership of Certain Beneficial Owners and Management 20
Item 12. Certain Relationships and Related Transactions 20
Item 13. Exhibits and Reports on Form 8-K 22
Item 14. Controls and Procedures 21
Certifications and Exhibits 23
2
PART I
ITEM 1. Description of Business
Tulvine Systems, Inc. (the "Company"), was incorporated on October 21, 1999
under the laws of the State of Delaware to engage in any lawful corporate
undertaking, including, but not limited to, selected mergers and acquisitions.
The Company has been in the developmental stage since inception and has no
operations to date other than issuing shares to its original shareholder. The
Company has been formed to provide a method for a foreign or domestic private
company to become a reporting ("public") company whose securities are qualified
for trading in the United States secondary market.
The Company registered its common stock on a Form 10-SB registration statement
filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and
Rule 12(g) thereof. The Company files periodic and episodic reports with the
Securities and Exchange Commission under Rule 13(a) of the Exchange Act,
including quarterly reports on Form 10-QSB and annual reports Form 10-KSB. As a
reporting company under the Exchange Act, the Company may register additional
securities on Form S-8 (provided that it is then in compliance with the
reporting requirements of the Exchange Act) and on Form S-3 (provided that is
has during the prior 12 month period timely filed all reports required under the
Exchange Act), and its class of common stock registered under the Exchange Act
may be traded in the United States securities markets provided that the Company
is then in compliance with applicable laws, rules and regulations, including
compliance with its reporting requirements under the Exchange Act.
The Company will attempt to locate and negotiate with a business entity for the
merger of that target business into the Company. In certain instances, a target
business may wish to become a subsidiary of the Company or may wish to
contribute assets to the Company rather than merge. No assurances can be given
that the Company will be successful in locating or negotiating with any target
business.
Management believes that there are perceived benefits to being a reporting
company with a class of publicly traded securities. These are commonly thought
to include (1) the ability to use registered securities to make acquisition of
assets or businesses; (2) increased visibility in the financial community; (3)
the facilitation of borrowing from financial institutions; (4) improved trading
efficiency; (5) shareholder liquidity; (6) greater ease in subsequently raising
capital; (7) compensation of key employees through stock options; (8) enhanced
corporate image; and (9) a presence in the United States capital market.
A business entity, if any, which may be interested in a business combination
with the Company may include (1) a company for which a primary purpose of
becoming public is the use of its securities for the acquisition of assets or
businesses; (2) a company which is unable to find an underwriter of its
3
securities or is unable to find an underwriter of securities on terms acceptable
to it; (3) a company which wishes to become public with less dilution of its
common stock than would occur normally upon an underwriting; (4) a company which
believes that it will be able to obtain investment capital on more favorable
terms after it has become public; (5) a foreign company which may wish an
initial entry into the United States securities market; (6) a special situation
company, such as a company seeking a public market to satisfy redemption
requirements under a qualified Employee Stock Option Plan; or (7) a company
seeking one or more of the other perceived benefits of becoming a public
company.
Management is actively engaged in seeking a qualified private company as a
candidate for a business combination. The Company is authorized to enter into a
definitive agreement with a wide variety of private businesses without
limitation as to their industry or revenues. It is not possible at this time to
predict with which private company, if any, the Company will enter into a
definitive agreement or what will be the industry, operating history, revenues,
future prospects or other characteristics of that company.
The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.
Management of the Company, which in all likelihood will not be experienced in
matters relating to the business of a target business, will rely upon its own
efforts in accomplishing the business purposes of the Company. Outside
consultants or advisors may be utilized by the Company to assist in the search
for qualified target companies. If the Company does retain such an outside
consultant or advisor, any cash fee earned by such person will need to be
assumed by the target business, as the Company has limited cash assets with
which to pay such obligation.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officer and director of the Company, who is not a
professional business analyst. In analyzing prospective business opportunities,
management may consider such matters as the available technical, financial and
managerial resources; working capital and other financial requirements; history
of operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors.
Management does not have the capacity to conduct as extensive an investigation
of a target business as might be undertaken by a venture capital fund or similar
4
institution. As a result, management may elect to merge with a target business
that has one or more undiscovered shortcomings and may, if given the choice to
select among target businesses, fail to enter into an agreement with the most
investment-worthy target business.
Following a business combination, the Company may benefit from the services of
others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a target business, management may recommend
one or more underwriters, financial advisors, accountants, public relations
firms or other consultants to provide such services.
A potential target business may have an agreement with a consultant or advisor
providing that services of the consultant or advisor be continued after any
business combination. Additionally, a target business may be presented to the
Company only on the condition that the services of a consultant or advisor be
continued after a merger or acquisition. Such preexisting agreements of target
businesses for the continuation of the services of attorneys, accountants,
advisors or consultants could be a factor in the selection of a target business.
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is likely that the present management and shareholders of the Company will no
longer be in control of the Company. In addition, it is likely that the
Company's officer and director will, as part of the terms of the acquisition
transaction, resign and be replaced by one or more new officers and directors.
It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of its transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
entered into an agreement for a business combination or has consummated a
business combination and the Company is no longer considered a blank check
company. The issuance of additional securities and their potential sale into any
trading market which may develop in the Company's securities may depress the
market value of the Company's securities in the future if such a market
develops, of which there is no assurance.
While the terms of a business transaction to which the Company may be a party
cannot be predicted, it is expected that the parties to the business transaction
will desire to avoid the creation of a taxable event and thereby structure the
acquisition in a tax-free reorganization under Sections 351 or 368 of the
Internal Revenue Code of 1986, as amended.
5
With respect to any merger or acquisition negotiations with a target business,
management expects to focus on the percentage of the Company which target
business shareholders would acquire in exchange for their shareholdings in the
target business. Depending upon, among other things, the target business's
assets and liabilities, the Company's shareholders will in all likelihood hold a
substantially lesser percentage ownership interest in the Company following any
merger or acquisition. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by the Company's shareholders at such time.
No assurances can be given that the Company will be able to enter into a
business combination, as to the terms of a business combination, or as to the
nature of the target business.
As of the date hereof, management has not made any final decision concerning or
entered into any agreements for a business combination. When any such agreement
is reached or other material fact occurs, the Company will file notice of such
agreement or fact with the Securities and Exchange Commission on Form 8-K.
Persons reading this Form 10-KSB are advised to determine if the Company has
subsequently filed a Form 8-K.
The Company anticipates that the selection of a business opportunity in which to
participate will be complex and without certainty of success. Management
believes (but has not conducted any research to confirm) that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits may include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, increasing the opportunity
to use securities for acquisitions, and providing liquidity for shareholders and
other factors. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex.
ITEM 2. Description of Property
The Company has no properties and at this time has no agreements to acquire any
properties. The Company currently uses the offices of Richmark Capital
Corporation, 5525 North MacArthur Blvd., Suite 615, Irving, Texas 75038, at no
cost to the Company. Management has agreed to continue this arrangement until
the Company completes an acquisition or merger.
6
ITEM 3. Legal Proceedings
There is no litigation pending or threatened by or against the Company.
ITEM 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fiscal year covered by this report.
PART II
ITEM 5. Market for Common Equity and Related Stockholders Matters
There is currently no public market for the securities of the Company. The
Company does not intend to trade its securities in the secondary market until
completion of a business combination or acquisition. It is anticipated that
following such occurrence the Company will cause its common stock to be listed
or admitted to quotation on the NASD OTC Bulletin Board or, if it then meets the
financial and other requirements thereof, on the Nasdaq SmallCap Market,
National Market System or regional or national exchange.
The proposed business activities described herein classify the Company as a
"blank check" company. The Securities and Exchange Commission and many states
have enacted statutes, rules and regulations limiting the sale of securities of
blank check companies in their respective jurisdictions. Management does not
intend to undertake any efforts to cause a market to develop in the Company's
securities until such time as the Company has successfully implemented its
business plan described herein. Accordingly, the shareholder of the Company has
executed and delivered a "lock-up" letter agreement, affirming that such
shareholder will not sell or otherwise transfer her shares of the Company's
common stock except in connection with or following completion of a merger or
acquisition and the Company is no longer classified as a blank check company.
The shareholder has deposited her stock certificate with the Company's
management, who will not release the certificates except in connection with or
following the completion of a merger or acquisition.
There is currently one shareholder of the outstanding common stock of the
Company. The Company has not designated nor issued any preferred stock.
7
Since inception, the Company has sold securities that were not registered as
follows:
Number of
Date Name Shares Consideration
October 21, 1999 Diane Golightly 1,000,000 $1,000
ITEM 6. Management's Discussion and Analysis or Plan of Operation
The Company was formed to engage in a merger with or acquisition of an
unidentified foreign or domestic private company that desires to become a
reporting ("public") company whose securities are qualified for trading in the
United States secondary market. The Company meets the definition of a "blank
check" company contained in Section (7)(b)(3) of the Securities Act of 1933, as
amended. The Company has been in the developmental stage since inception and has
no operations to date. Other than issuing shares to its original shareholder,
the Company has not commenced any operational activities.
Management is actively engaged in seeking a qualified private company as a
candidate for a business combination. The Company is authorized to enter into a
definitive agreement with a wide variety of private businesses without
limitation as to their industry or revenues. It is not possible at this time to
predict with which private company, if any, the Company will enter into a
definitive agreement or what will be the industry, operating history, revenues,
future prospects or other characteristics of that company.
The Company will not acquire or merge with any entity that cannot provide
audited financial statements at or within a reasonable period of time after
closing of the proposed transaction. The Company is subject to all the reporting
requirements included in the Exchange Act. Included in these requirements is the
duty of the Company to file audited financial statements as part of its Form 8-K
to be filed with the Securities and Exchange Commission upon consummation of a
merger or acquisition, as well as the Company's audited financial statements
included in its annual report on Form 10-K (or 10-KSB, as applicable). If such
audited financial statements are not available at closing, or within time
parameters necessary to insure the Company's compliance with the requirements of
the Exchange Act, or if the audited financial statements provided do not conform
to the representations made by the target business, the closing documents may
provide that the proposed transaction will be voidable at the discretion of the
present management of the Company.
The Company will not restrict its search for any specific kind of businesses,
but may acquire a business that is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business life.
8
It is impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer.
A business combination with a target business will normally involve the transfer
to the target business of the majority of common stock of the Company, and the
substitution by the target business of its own management and board of
directors.
The Company has, and will continue to have, no capital with which to provide the
owners of business opportunities with any cash or other assets. However,
management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire a controlling ownership interest in a
publicly registered company without incurring the cost and time required to
conduct an initial public offering. The officer and director of the Company has
not conducted market research and is not aware of statistical data to support
the perceived benefits of a merger or acquisition transaction for the owners of
a business opportunity.
The Company's shareholder has agreed that she will advance to the Company any
additional funds that the Company needs for operating capital and for costs in
connection with searching for or completing an acquisition or merger. Such
advances will be made without expectation of repayment unless the owners of the
business which the Company acquires or merges with agree to repay all or a
portion of such advances. There is no minimum or maximum amount such shareholder
will advance to the Company. The Company will not borrow any funds for the
purpose of repaying advances made by such shareholder, and the Company will not
borrow any funds to make any payments to the Company's promoters, management or
their affiliates or associates.
The Board of Directors has passed a resolution which contains a policy that the
Company will not seek an acquisition or merger with any entity in which the
Company's officer, director, shareholder or her affiliates or associates serve
as officer or director or hold any ownership interest.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. For example, unexpected changes in market conditions or a downturn in
the economy could adversely affect actual results. Estimates are used in
accounting for, among other things, inventory obsolescence, goodwill valuation,
retail inventory method, legal liability, product warranty, depreciation,
employee benefits, taxes, and contingencies. Estimates and assumptions are
reviewed periodically and the effects of revisions are reflected in the
Financial Statements in the period they are determined to be necessary.
9
The Company is currently in the development stage and management believes, since
it has only nominal assets and no known liabilities, there are currently no
critical accounting policies which affect its more significant judgments and
estimates used in the preparation of its Financial Statements.
ITEM 7. Financial Statements.
INDEX
Page #
-----
Independent auditors' report 11
Balance sheet as of December 31, 2002 12
Statements of operations for the years ended December 31, 2002 and 2001
and for the period from October 21, 1999 (Inception) to December 31, 2002 13
Statement of changes in stockholders' equity for the period from
October 21, 1999 (Inception) to December 31, 2002 14
Statements of cash flows for the years ended December 31, 2002 and 2001
and for the period from October 21, 1999 (Inception) to December 31, 2002 15
Notes to financial statements as of December 31, 2002 16-17
10
Independent Auditors' Report
The Board of Directors
Tulvine Systems, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of Tulvine Systems, Inc. (a
development stage company) as of December 31, 2002 and the related statements of
operations, changes in stockholders' equity and cash flows for the years ended
December 31, 2002 and 2001 and the period from inception (October 21, 1999) to
December 31, 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits 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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Tulvine Systems, Inc. (a
development stage company) as of December 31, 2002, and the results of its
operations and its cash flows for the years ended December 31, 2002 and 2001 and
the period from inception (October 21, 1999) to December 31, 2002 in conformity
with accounting principles generally accepted in the United States of America.
/s/ Stephen P. Higgins, C.P.A.
Stephen P. Higgins, C.P.A.
Port Washington, New York
April 4, 2003
11
Tulvine Systems, Inc.
(A Development Stage Company)
Balance Sheet
As of December 31, 2002
ASSETS
Current assets:
Cash and cash equivalents ........................................... $ 500
------
Total current assets .............................................. 500
Organizational costs .................................................. 500
------
Total assets ...................................................... $1,000
======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
$ --
------
Total current liabilities ......................................... $ --
Commitments and contingencies
Stockholders' equity:
Common stock; $.0001 par value; authorized 100,000,000 shares; issued
and outstanding 1,000,000 shares ................................... 100
Additional paid-in capital .......................................... 900
Retained earnings ................................................... --
------
Total stockholders' equity ........................................ 1,000
------
Total liabilities and stockholders' equity ...................... $1,000
======
See accompanying notes to financial statements
12
Tulvine Systems, Inc.
(A Development Stage Company)
Statements of Operations
Years ended December 31, 2002 and 2001 and the period from inception (October
21, 1999) to December 31, 2002
From
Inception
October 21,
1999 to
Year Ended December 31, December 31,
2002 2001 2002
---- ---- ----
Revenue ........................................... $ -- $ -- $ --
--------- --------- ----------
--------- --------- ----------
Selling, general and administrative expenses ...... -- $ -- $ --
--------- --------- ----------
Net earnings (loss) ............................... $ -- $ -- $ --
========= ========= ==========
Earnings (loss) per common share, basic and diluted $ -- $ -- $ --
========= ========= ==========
Weighted average common shares .................... 1,000,000 1,000,000 1,000,000
========= ========= ==========
See accompanying notes to financial statements
13
Tulvine Systems, Inc.
(A Development Stage Company)
Statements of Changes in Stockholders' Equity
Inception (October 21, 1999) to December 31, 2002
Additional
Common Stock Paid in Retained
Shares Amount Capital Earnings Total
Balance October 21, 1999 ... -- $ -- $ -- $-- $ --
Common stock issued for cash 1,000,000 100 900 -- 1,000
Net earnings (loss) ........ -- -- -- -- --
--------- --------- --------- ---- ---------
Balance December 31, 1999 .. 1,000,000 100 900 -- 1,000
Net earnings (loss) ........ -- -- -- -- --
--------- --------- --------- ---- ---------
Balance December 31, 2000 .. 1,000,000 100 900 -- 1,000
Net earnings (loss) ........ -- -- -- -- --
--------- --------- --------- ---- ---------
Balance December 31, 2001 .. 1,000,000 100 900 -- 1,000
Net earnings (loss) ........ -- -- -- -- --
--------- --------- --------- ---- ---------
Balance December 31, 2002 .. 1,000,000 $ 100 $ 900 $-- $ 1,000
========= ========= ========= ==== =========
See accompanying notes to financial statements
14
Tulvine Systems, Inc.
(A Development Stage Company)
Statements of Cash Flows
Year ended December 31, 2002 and 2001 and the periods from inception (October
21, 1999) to December 31, 2002
From
Inception
October 21,
1999 to
Year Ended December 31, December 31,
2002 2001 2002
---- ---- ----
Cash flows from operating activities:
Net earnings (loss) ........................... $ -- $ -- $ --
Adjustments to reconcile net earnings (loss)
to net cash used in operating activities:
Organizational costs ..................... -- -- (500)
------- ------- -------
Net cash flows used in operating activities -- -- (500)
Cash flows from investing activities:
------- ------- -------
------- ------- -------
Net cash provided by investing activities ... -- -- --
Cash flows from financing activities:
Proceeds from sale of common stock ............ -- -- 1,000
------- ------- -------
Net cash provided by financing activities . -- -- 1,000
Net increase in cash and cash equivalents . -- -- 500
Cash and cash equivalents, beginning ...... 500 500 --
------- ------- -------
Cash and cash equivalents, end of period .. $ 500 $ 500 $ 500
======= ======= =======
Supplemental cash flow information:
Interest paid ................................. $ -- $ -- $ --
Income taxes paid ............................. $ -- $ -- $ --
See accompanying notes to financial statements
15
Tulvine Systems, Inc.
(A Development Stage Company)
Notes to Financial Statements
As of December 31, 2002
NOTE 1 - Summary of Significant Accounting Policies
A. Organization and Business Operations
Tulvine Systems, Inc. (a development stage company) ("the Company") was
incorporated in Delaware on October 21, 1999 to serve as a vehicle to effect a
merger, exchange of capital stock, asset acquisition or other business
combination with a domestic or a foreign private business. At December 31, 2002,
the Company had not yet commenced any formal business operations, and all
activity to date relates to the Company's formation and proposed fund raising.
The Company's fiscal year end is December 31.
The Company's ability to commence operations is contingent upon its ability to
identify a prospective target business and raise the capital it will require
through the issuance of equity securities, debt securities, bank borrowings or a
combination thereof.
B. Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
C. Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.
D. Income Taxes
The Company accounts for income taxes under the Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). Under SFAS 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. There were no current or deferred income tax expense or benefits
due to the Company's limited operations for the period ended December 31, 2000.
16
E. Net earnings (loss) per share
Net earnings (loss) per share amounts are computed using the weighted average
number of shares outstanding during the period. Fully diluted earnings (loss)
per share is presented if the assumed conversion of common stock equivalents
results in material dilution. There were no common stock equivalents outstanding
at December 31, 2002.
F. New Accounting Pronouncements
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which is effective for exit or disposal
activities initiated after December 31, 2002. This statement requires that
liabilities associated with exit or disposal activities initiated after adoption
be recognized and measured at fair value when incurred, as opposed to at the
date an entity commits to the exit or disposal plans. The adoption of this
standard did not have any impact on the Company's financial position, earnings
or cash flows.
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," which amends SFAS No. 123, "Accounting
for Stock-Based Compensation." SFAS No. 148 provides alternate methods of
transition for a voluntary change to the fair-value-based method of accounting
for stock-based employee compensation. In addition, SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require more prominent and frequent
disclosures in financial statements about the effects of stock-based
compensation. The disclosure requirements have been adopted for the Company's
current year financial statements, with no impact.
NOTE 2 - Stockholder's Equity
The Company is authorized to issue 100,000,000 shares of common stock having a
par value of $.0001 per share. The Company issued 1,000,000 shares to Diane
Golightly pursuant to Rule 506 for an aggregate consideration of $1,000.
17
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
There were no disagreements with accountants on accounting and financial
disclosure for the period covered by this report.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act
Directors, Executive Officers, Promoters and Control Persons:
The following table sets forth the names, ages and current positions with the
Company held by the Directors, Executive Officers and Significant Employees,
together with the date such positions were assumed. There is no immediate family
relationship between or among any of the Directors, Executive Officers or
Significant Employees, and the Company is not aware of any arrangement or
understanding between any Director or Executive Officer and any other person
pursuant to which he was elected to his current position.
Position or Office Date First
Name Age With the Company Elected
Diane Golightly 37 President/CEO/Secretary/ Oct 1999
Director
Diane Golightly - Ms. Golightly received an Associate in Science from Cook
County College in 1984. From 1987 to 1997, Ms. Golightly served as the Residency
Program Coordinator for Physical Medicine and Rehabilitation at the University
of Texas Southwestern Medical School. Currently Ms. Golightly is a senior
administrator at the medical offices of Dr. Farrukh Hamid in Carrolton, Texas,
and has served in this capacity since 1997.
Conflicts of Interest
Insofar as the officer and director, Ms. Golightly, is engaged in other business
and personal activities, management anticipates that it will devote only a minor
amount of time to the Company's affairs. The Company does not have a right of
first refusal pertaining to opportunities that come to management's attention
insofar as such opportunities may relate to the Company's proposed business
operations. Ms. Golightly will be responsible for seeking, evaluating,
negotiating and consummating a business combination with a target company which
may result in terms providing benefits to Mr. Cassidy.
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Ms. Golightly is responsible for implementation and maintenance of several
different administrative systems at the medical practice of Dr. Farrukh Hamid.
As such, demands may be placed on the time of Ms. Golightly which will detract
from the amount of time she is able to devote to the Company. Ms. Golightly
intends to devote as much time to the activities of the Company as required.
However, should such a conflict arise, there is no assurance that Ms. Golightly
would not attend to other matters prior to those of the Company. Ms. Golightly
estimates that the business plan of the Company can be implemented in theory by
devoting approximately 10 to 15 hours per month over the course of several
months but such figure cannot be stated with precision.
Ms. Golightly is the president, director and sole shareholder of all of the
Company's issued common stock. At the time of a business combination, management
expects that some or all of the shares of Common Stock owned by Diane Golightly
will be purchased by the target company.
The terms of any business combination may include such terms as Ms. Golightly
remaining a director or officer of the Company and/or other service to the
Company. The terms of a business combination may provide for a payment by cash
or otherwise to Diane Golightly for the purchase of all or part of her common
stock of the Company by a target company or for services rendered incident to or
following a business combination. Ms. Golightly would directly benefit from such
employment or payment. Such benefits may influence Ms. Golightly's choice of a
target company.
The Company will not enter into a business combination, or acquire any assets of
any kind for its securities, in which management or promoters of the Company or
any affiliates or associates have any interest, direct or indirect.
There are no binding guidelines or procedures for resolving potential conflicts
of interest. Failure by management to resolve conflicts of interest in favor of
the Company could result in liability of management to the Company.
Item 10. Executive Compensation
The Company's officer and director does not receive any compensation for her
services rendered to the Company, nor has she received such compensation in the
past. As of the date of this report, the Company has no funds available to pay
the officer and director. Further, the officer and director is not accruing any
compensation pursuant to any agreement with the Company.
The officer and director of the Company will not receive any finder's fee,
either directly or indirectly, as a result of her efforts to implement the
Company's business plan outlined herein. However, the officer and director of
the Company anticipates receiving benefits as a beneficial shareholder of the
Company.
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No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of its
employees.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of March 31, 2003, each person known by the
Company to own beneficially more than 5% of any class of the Company's common
stock and the director and officer of the Company. The holder hereof has sole
voting and investment power with respect to the shares shown.
Name and address Amount and Nature
Title of Beneficial of Beneficial % of
of class Owner Owner Class
Common Diane Golightly 1,000,000 100.00%
7633 E 63rd Pl, Ste 210
Tulsa, OK 74133
Common All directors and executive officers 1,000,000 100.00%
as a group (one person)
Item 12. Certain Relationships and Related Transactions
On October 21, 1999, the Company issued a total of 1,000,000 shares of Common
Stock to the Diane Golightly, the Company's sole officer and director, for a
total of $1,000 in cash.
The Board of Directors has passed a resolution which contains a policy that the
Company will not seek an acquisition or merger with any entity in which the
Company's officer, director or shareholder or their affiliates or associates
serve as officer or director or hold any ownership interest. Management is not
aware of any circumstances under which this policy may be changed.
The proposed business activities described herein classify the Company as a
"blank check" company. The Securities and Exchange Commission and many states
have enacted statutes, rules and regulations limiting the sale of securities of
blank check companies in their respective jurisdictions. Management does not
intend to undertake any efforts to cause a market to develop in the Company's
securities until such time as the Company has successfully implemented its
business plan described herein. Accordingly, the shareholder of the Company has
executed and delivered a "lock-up" letter agreement, affirming that such
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shareholder shall not sell her shares of the Company's common stock until such
time as the Company has successfully consummated a merger or acquisition and the
Company is no longer classified as a blank check company. The shareholder has
placed the stock certificates with the Company, which will not release the
certificates until such time as a merger or acquisition has been successfully
consummated.
Item 14. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Based on her evaluation of
our disclosure controls and procedures (as defined in Rules 13a-14(c) and
15(d)-14(c) under the Securities Exchange Act of 1934) as of a date within 90
days of the filing date of this Annual Report on Form 10-KSB, our chief
executive officer concluded that our disclosure controls and procedures are (i)
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms and (ii) operating in an effective manner.
(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their most recent evaluation.
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Item 13. Exhibits and Reports on Form 8-K
a) Exhibits - See Exhibit Index at page 24.
b) Reports on Form 8-K - none filed during the quarter ended December 31, 2002.
SIGNATURES
In accordance with the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TULVINE SYSTEMS, INC.
Date - April 10, 2003 By: /s/ Diane Golightly
-------------------------------
Diane Golightly
Chief Executive Officer
Principal Accounting Officer
In accordance with 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 indicated.
Date - April 10, 2003 By: /s/ Diane Golightly
-------------------------------
Diane Golightly, Director
22
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In conjunction with the accompanying Annual Report of Tulvine Systems, Inc. (the
"Company") on Form 10-KSB for the fiscal year ending December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Diane Golightly, President and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:
1. I have reviewed the Report;
2. Based on my knowledge, the Report does not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as, and for the periods presented in the
Report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have;
a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made
known to me by others within the Company, particularly during
the period in which this annual report is being prepared;
b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of the Report (the "Evaluation Date"); and
c) presented in the Report my conclusions about the effectiveness
of the disclosure controls and procedures based on my
evaluation as of the Evaluation date;
5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls;
6. I have indicated in the Report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
/s/ Diane Golightly
-------------------
Diane Golightly
President and Chief Executive Officer
April 10, 2003
23
EXHIBITS HAVE BEEN OMITTED FROM THIS COPY. COPIES OF EXHIBITS MAY BE OBTAINED
FROM TULVINE SYSTEMS, INC. (THE "COMPANY") UPON REQUEST AND PAYMENT OF THE
COMPANY'S COSTS IN FURNISHING SUCH COPIES. COPIES MAY ALSO BE OBTAINED FROM THE
SECURITIES AND EXCHANGE COMMISSION FOR A SLIGHT CHARGE.
(The foregoing is not applicable to the original(s) hereof.)
EXHIBIT INDEX
Securities and
Exchange
Commission Page
Exhibit No. Type of Exhibit Number
2 Plan of acquisition, reorganization, arrangement, N/A
liquidation, or succession
3(i) Articles of incorporation N/A
3(ii) By-laws N/A
4 Instruments defining the rights of holders, incl. Indentures N/A
9 Voting trust agreement N/A
10 Material contracts N/A
11 Statement re: computation of per share earnings Item 7
16 Letter on change in certifying accountant N/A
18 Letter on change in accounting principles N/A
21 Subsidiaries of the Registrant N/A
22 Published report regarding matters submitted to vote N/A
23 Consent of experts and counsel N/A
24 Power of Attorney N/A
99.1 Certification pursuant to 18 U.S.C. Section 1350 25
24
Exhibit 99.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
Pursuant to, and solely for purposes of, 18 U.S.C. Section 1350 (Section 906 of
the Sarbanes-Oxley Act of 2002), the undersigned hereby certifies in the
capacity and on the date indicated below that:
1. The Annual Report of Tulvine Systems, Inc., the Registrant, on Form 10-KSB
for the period ended December 31, 2002 as filed with the Securities and Exchange
Commission on the date hereof (the "Report") fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.
April 10, 2003 /s/ Diane Golightly
----------------------------------
Diane Golightly
President and Chief Executive Officer
25