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To: jjs64 who wrote (8054)	5/30/2000 1:58:00 PM
From: StockDung	Respond to of 10354

205 S. Helix, #68 Solana Beach, California 92075 If to ZiaSun, addressed to it at: Mr. Bryant D. Cragun, President ZiaSun Technologies, Inc. 205 S. Helix, #68 Solana Beach, California 92075 Page 9 of 13 With copy to Counsel, addressed to: George G. Chachas, Esq. Wenthur & Chachas 4180 La Jolla Village Drive Suite 500 La Jolla, California 92037 tenkwizard.com.

To: jjs64 who wrote (8054)	5/30/2000 6:39:00 PM
From: StockDung	Respond to of 10354

FINGERMATRIX INC filed this 10-K on 05/23/2000. In connection with the SES Merger, we exchanged shares of the Series A Preferred Stock for indebtedness aggregating $648,000. P.T. Dolak Permei ("Permei"), an Indonesian company, was one of our then creditors and exchanged an aggregate of $230,833 of such indebtedness for 2,259 shares of Series A Preferred Stock (convertible into an aggregate of 1,677,985 shares of Common Stock). As of December 31, 1999, Permei owns 1,500,000 shares of Common Stock and 2,259 shares of Series A Preferred Stock.

To: jjs64 who wrote (8054)	5/30/2000 7:48:00 PM
From: StockDung	Respond to of 10354

The SEC alleged in administrative charges that CPAs R. Gordon Jones and Mark Jensen ``recklessly'' violated professional auditing standards in a 1995 audit of Dynamic American, which described itself as a mining company

To: jjs64 who wrote (8054)	5/30/2000 9:19:00 PM
From: StockDung	Respond to of 10354

Sky seemed the limit for Sky Sci investors -------------------------------------------------------------------------------- What Sky Scientific Inc. offered investors or so stock promoters told them during 1993 and 1994 -- was a literal gold mine. But anyone with a clue about Sky Sci's track record might have thought twice about plunking down even a modest investment in its stock. The story of how a tiny Florida company with an odd-ball history landed among Nasdaq's 10 most active stocks is at the core of the Securities and Exchange Commission's case against Gilbert Marshall & Co. and Michael Usher. Florida newspaper articles and wire stories written in the mid 1990s describe a company with tentacles that reached the most unlikely places: casinos, precious-metal mining claims, luxury clubs for the rich and powerful. The strangest of these accounts appeared in September 1995. The PR Newswire, an outlet for business-related news, carried a story about how Sky had planned to use a Russian aircraft carrier and 15 helicopters that it had recently purchased to operate as a floating casino off the Florida coast. Glossy brochures and phony newsletters announced that the Tallulah Mine in western Nevada held promise for enormous returns for those who got in early. "Getting the gold out," according to a geologist quoted in the newsletters, "is like pushing a cart down a supermarket aisle, picking food from the shelves and tossing it into the basket." Trouble was, Sky-Sci had no gold. Infact, Sky-Sci had very little. The company's gross revenue for the years 1993 and 1994 totaled $35,052, according to the SEC. It is true that the paper tower built during the summer of 1994 resulted in enormous profits for many investors. Sky's stock soared as demand, fed by a wholly concocted public-relations campaign, had stock watchers frantically seeking the scarce shares. In early 1993, daily volume in the firm's stock was about 4,000 shares, and its price hovered around 75 cents. By April 1993, as the promotion scheme began, volume went to 200,000 shares daily, and the price to $4.50. Sky Sci eventually reached a high of $17.50 in the summer of 1994. "Despite its inability to establish its mining business," Administrative Law Judge Robert Mahoney said in his decision, "the company had great success marketing its stock." But, almost as with the classic pyramid game, the late-comers joined those who held on too long as the case's biggest losers. "The stories these people told were so sad," SEC lawyer Robert Fusfeld said of the investors who lined up at an agency hearing with their tales of woe. "One guy, a former IBM employee, invested his entire retirement in Sky Scientific. When it went down, he had to go back to work." Sky Sci's stock now shows up on the OTC bulletin board with a bid price of a penny and a half. Fort Lauderdale, Fla., lawyer Howard Tescher, who represents Sky Sci managers and stock promoters in the SEC case, said the company went out of business in 1997. Copyright Northern Colorado Business Review Jul 02, 1999

To: jjs64 who wrote (8054)	5/30/2000 9:23:00 PM
From: StockDung	Respond to of 10354

The fall of the house of Usher -------------------------------------------------------------------------------- GREELEY -- Metaphors were the order of the day March 8, when the U.S. Securities and Exchange Commission announced the stiffest penalties in state history against a leading Greeley-stock brokerage and its president. "An empty paper bag," is how the SEC regional director Daniel Shea described the stock scheme that brought down Gilbert Marshall & Co. and founder Michael A. Usher. "The poster child of micro-cap fraud" is how Shea described Sky Scientific Inc., the company whose stock was at the center of the case. Usher himself adopted a metaphor when he read the findings of the administrative law judge who slapped him with a $250,000 civil fine, barred him from the securities business for life and ordered him and his company to return $5.4 million to investors - an amount the SEC described as "profits" of the scheme. "It made me out to be Al Capone," Usher said during a June interview. "I couldn't believe what I was reading." The SEC claims that Usher profited personally from the scheme that drew in three brokers under his supervision at a Denver Gilbert Marshall affiliate. But Usher's Denver lawyer, John Schlie, has contended that Gilbert Marshall & Co. lost money during the period that the fraudulent stock promotion unfolded. "There were no 'profits,'" Schlie said. "He made nothing more than his salary. If you count the attorney's fees, Gilbert Marshall lost money." The 38-page ruling detailed how the Denver affiliate peddled stock in Sky Scientific, a Florida-based company that investors were told had promising gold claims in Nevada and California. No one disputes now that Sky Scientific was hardly in the gold-mining business or that the company's revenue and assets were close to zero during the time in the summer of 1994 that it became one of Nasdaqs 10 most active stocks. And a flurry of finger-pointing has surrounded the investigation of the elaborate scheme that inflated the value of a company with $35,052 in revenue to $80 million just a year later. "It was a classic hype-and-dump scheme," SEC staff lawyer Robert Fusfeld said June 8, the day before the 90-day appeal period for Usher and 17 other defendants was to expire. "As the buyers were buying it, the promoter was out dumping it - and keeping two-thirds of the proceeds." The SEC contends that Usher was an active participant in an elaborate plot to market unregistered shares of Sky Scientific stock at illegally jacked-tip prices. According to the judgment, the stock issued by Sky was funneled through a Canadian investment house to brokers throughout the United States, including Gilbert Marshall's Denver franchise. Usher's defense has hinged on whether he was in a position to know that the Sky stock was suspect. Usher, whose lawyer tendered a settlement offer to the SEC on the eve of the appeal deadline, declines to discuss details of the case pending a ruling on the settlement proposal. But others acquainted with the proposal have said that Usher, if the five-member Securities and Exchange Commission approves, will pay a $10,000 civil fine and have all other provisions of the ruling lifted. While reticent in discussing the case, Usher employs another word image to describe his ordeal: Since the events that led to the ruling, Usher has been on what he describes as a "runaway freight train that just doesn't seem to want to stop." But in the weeks since the SEC announcement, more than 100 of Usher's friends and clients led the effort to put on the brakes. A letter-writing campaign targeted Sen. Wayne Allard R-Colo., seeking his intervention during the appeal period. The connection to Allard's office was through Warren Lasell, for eight years the Weld County Assessor and the only Democrat elected to office in the county during six of those. "He is certainly one of the most ethical people I have ever met in my life," Lasell said. I was concerned that Mike find whatever help he might have available to him. It just happened that I had a contact there, and I gave him a call." Lasell called Allard press secretary Sean Conway to suggest he meet with Usher. Allard kept his distance, but his chief of staff and two other staff members made phone calls and held meetings in Allards Washington office to discuss Usher's predicament. At each turn, Allard was briefed either by e-mail or verbally about the Usher case, Conway said. The ruling handed down in March is a scorching indictment of Usher. "Egregious" is how administrative law judge Robert Mahoney described Usher's failure to investigate the company and its stock, which was sold by brokers at the Denver franchise. Usher either "knew or was reckless in not knowing" that Sky Scientific stock was being fraudulently traded, Mahoney said. "A searching inquiry was called for, but was not carried out," he wrote. Usher "defrauded Gilbert Marshall customers out of millions of dollars," the judge concluded. But Usher and Schlie contend that the seeds of the scheme were sown far away, in Florida, by Sky and promoters of its stock and that Usher was a victim of their lies. They cite alleged false statements in Sky Scientific's 1994 SEC filings, showing assets of $69.7 million, including mining properties and certificates of deposit. The SEC later concluded that neither the mining claims nor the CDs, held by a Russian bank, had value. "Not only is Mike being held accountable for what happened at Gilbert and Marshall, but he's also being held responsible for what happened at the company," Schlie said. "If someone says a gold mine is in production, is it your responsibility to fly to Nevada, and backpack up some mountain to see if they are, in fact, mining gold? I don't think so." Among dozens of people contacted during the preparation of this report, no one outside the SEC has had an unkind word to say about 52-year-old Usher. He is -on paper and in the words of his friends and clients - a proverbial pillar of the community. For 11 years following his 1969 graduation from the University of Northern Colorado, Usher taught math at Greeley West High School, earning his master's degree along the way. He taught in London in 1978 as a Fulbright fellow. He authored two mathematics text books, and was the runner-up as Colorado Math Educator of the Year in 1980. He turned his attention to the investment business in 1981, first as a broker with Hanifen Imhoff's Greeley office. In 1984, he left to found his own company, Gilbert Marshall, where he was president and CEO until the roof caved in during the SEC investigation in 1997. The rest of his record reads like a candidate's: a term as governor of Kiwanis International organizations in Colorado, Wyoming and Nebraska; election as president of the Kiwanis International Foundation Board and of the Northern Colorado Board of the American Cancer Society; numerous committee positions with the Weld County schools. Usher's clients, whose letters made up the bulk of the mail to Allard regarding his case, have remained loyal. "Ninety-nine point nine percent of my clients have stayed with me," Usher said this week. "Why would they do that? Doesn't that say something?" Most of the letters suggest that even a token fine in Ushers case would be an injustice. Even $10,000 is too much, Lasell said. "But they can extract that from people," he said. "What bothers me is here is this big part of government, the SEC, that has the power to charge - to indict, if you will - Mike Usher. It's a case of a giant taking on a small citizen." Lasell said he learned first of the case when he picked up the Greeley Tribune to find a front-page story about the judgment against Usher. "If you read the headline, and the first couple of paragraphs, Mike's a crook," Lasell said. "That's just not the case." Usher, too, remembers the press coverage of the ruling as his darkest day. "To say it was a nightmare would be a grand understatement," Usher said. I told my wife that night, 'Well, I guess I'll find out now who my friends are.' I found out that I have quite a few." Copyright Northern Colorado Business Review Jul 02, 1999

To: jjs64 who wrote (8054)	5/30/2000 9:30:00 PM
From: StockDung	Respond to of 10354

UNITED STATES SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 41241 / April 1, 1999 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 1122 / April 1, 1999 ADMINISTRATIVE PROCEEDING File No. 3-9863 ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST FORMER AUDITORS OF SKY SCIENTIFIC, INC. The Commission has instituted administrative proceedings pursuant to Rule 102(e) of the Commission?s Rules of Practice against Barry C. Scutillo ("Scutillo"), CPA, and Mark F. Jensen ("Jensen"), CPA, charging that they engaged in improper professional conduct by recklessly violating professional auditing and accounting standards in connection with the audit of the 1994 financial statements of Sky Scientific, Inc. ("Sky"). Previously, the Commission instituted administrative and cease-and-desist proceedings against Sky and seventeen other individuals and entities for their roles in a fraudulent scheme involving the filing of false and misleading periodic reports with the Commission, and the issuance of millions of shares of stock, most registered on Forms S-8 and issued to consultants who then sold the stock and returned a portion of the proceeds to Sky. Based in Boca Raton, Florida, Sky purported to be in the business of mining and processing precious metals and in financial services. The Division of Enforcement alleged that Sky?s periodic reports materially overstated its assets by assigning a $40 million value to phony Russian certificates of deposit ("CDs"), representing 57% of total assets; materially understated its net loss by failing to expense the cost of issuing the stock to consultants; and materially overstated the value of its mineral properties at $29.5 million, representing 42% of total assets. Following trial, an Administrative Law Judge recently ruled that Sky and the others had violated the antifraud and registration provisions of the federal securities laws as charged. In the Matter of Sky Scientific, Inc. et al., Admin. Proc. File No. 3-9201, Initial Decision Release No. 137 (March 5, 1999). In the Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission?s Rules of Practice ("Order") against Scutillo, of southern Florida, and Jensen, of Salt Lake City, Utah, the Division of Enforcement alleges that they did not conduct their audit of Sky?s 1994 financial statements in accordance with Generally Accepted Auditing Standards ("GAAS"). The Order alleges that Scutillo and Jensen, the engagement partner and concurring partner, respectively, failed to comply with GAAS in that they failed to plan or perform appropriate audit procedures to audit Sky?s Russian CDs and its mineral properties; failed to maintain control over the confirmation request and response process concerning the CDs; failed to obtain sufficient competent evidential matter concerning the validity and valuation of the CDs, the valuation of the mineral properties and the value of Sky?s issuances of the Form S-8 stock. Finally, the Order alleges that Scutillo and Jensen engaged in improper professional conduct by failing to assure that Sky?s financial statements complied with Generally Accepted Accounting Principles concerning the CDs, the mineral properties and the Form S-8 stock. A hearing will be held before an administrative law judge to determine whether the staff's allegations are true, and if so, whether Scutillo and/or Jensen should be censured or temporarily or permanently disqualified from, and denied the privilege of appearing or practicing before the Commission. 1

To: jjs64 who wrote (8054)	5/30/2000 10:25:00 PM
From: StockDung	Respond to of 10354

DYNAMIC AMERICAN CORP filed this 10-K/A on 11/18/1996. Note: This Drop-Down Box allows you to navigate through the filing. The number with in the "( )" is the number of lines. e.g. "Item 1.Business(323)" = This section is called "Item 1.Business" and it is 323 lines long. Entire Document (1874) 10-K/A (1771) PART I (194) Item 1. Business (146) Item 2. Properties (34) Item 3. Legal Proceedings (5) Item 4. Submission of Matters to a Vote of Security Holders (7) PART II (192) Item 5. Market for the Registrant`s Common Stock and Related Stockholders (37) Item 6. Selected Consolidated Financial Data (28) Item 7. Management`s Discussion and Analysis of Financial Condition and (104) Item 8. Financial Statements and Supplementary Data (12) Item 9. Changes in and Disagreement with Accountants on Accounting (9) PART III (1314) Item 10. Directors and Executive Officers of the Registrant (49) Item 11. Executive Compensation (23) Item 12. Security Ownership of Certain Beneficial Owners and Management (20) Item 13. Certain Relationships and Related Transactions (9) Item 14. Exhibits, Consolidated Financial Statement Schedules and Reports (53) SIGNATURES (33) Item 14. These consolidated financial statements and consolidated financial (1125) CONSOLIDATED FINANCIAL STATEMENTS (8) C O N T E N T S (20) Consolidated Balance Sheets (126) CURRENT ASSETS (10) PROPERTY AND EQUIPMENT (9) OTHER ASSETS (46) LONG TERM DEBT (20) STOCKHOLDERS` EQUITY (28) Consolidated Statements of Operations (143) EXPENSES (128) Consolidated Statements of Cash Flows (777) CASH FLOWS FROM OPERATING ACTIVITIES (499) EXPENSES (198) INVENTORY VALUATION RESERVE (67) Entire Filing, Back to Search, New Search, Previous Section,View Header More About DYNAMIC AMERICAN CORP: Income Statement Balance Sheet Insider Trading Snapshot -----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BsVCNEgcwOVJfE03Lj/AQw0+CWp1EcWj4O1sMuyjM4j29QVaWvU+PZxyM1NHw0w9 sP9PjENHEVruRWQwJ9044g== ACCESSION NUMBER: 0001023175-96-000008 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19961118 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYNAMIC AMERICAN CORP CENTRAL INDEX KEY: 0000030780 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 870267027 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-05628 FILM NUMBER: 96668456 BUSINESS ADDRESS: STREET 1: PO BOX 870 STREET 2: 10 N CENTRAL CITY: HILDALE STATE: UT ZIP: 84102 BUSINESS PHONE: 8019720963 MAIL ADDRESS: STREET 1: P O BOX 870 CITY: HILLDALE STATE: UT ZIP: 84102 FORMER COMPANY: FORMER CONFORMED NAME: DYNA FLEX CORP DATE OF NAME CHANGE: 19750309 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL LAND CORP DATE OF NAME CHANGE: 19730530 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDED FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended September 30, 1995 Commission File Number 0-5628 DYNAMIC AMERICAN CORPORATION ---------------------------------- (Exact Name of Company as Specified in its Charter) Utah 87-0267027 --------- -------------------------- (State of Incorporation) (IRS Employer Identification Number) 476 Wilson Avenue, Novato, California 94947 ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Company's Telephone Number, Including Area Code (415)897-1380 Securities registered pursuant to Section 12(g) of the Act: Common stock of $.001 par value per share ------------------------------------------ (Title of Class) Indicate by check mark whether the Company (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 company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.[ x ] Yes No [ ]. As of August 2, 1996, the aggregate market value of the common shares held by non affiliates was approximately $2,625,000. The number of shares outstanding of the Company's common stock as of September 30, 1995: Common Stock 2,115,000 ---------------- ---------------------------- (Title of Class) (Number of Shares outstanding) There are no documents incorporated by reference in this Annual Report on Form 10-K. Note: Please be advised that the Company originally filed Form 10-K for the year ending September 30, 1995 on or about August 2, 1996, that report included financial statements prepared by the Company's auditors. Subsequently, the Company learned that said financial statements were prepared in draft form only and were not suitable for submission to the SEC or dissemination to the public. Subsequently, the auditors concluded their audit of the Company's books and records and have produced the financial statements attached hereto. This amended 10-K contains the Company's complete audited financial statements for the nine months ended September 30, 1995. PART I Item 1. Business --------- (A) General development of business: Dynamic American Corporation (the Company) was incorporated September 29, 1961, in the state of Utah as a general business corporation, originally under the name of National Land Corporation. The company was organized for the purpose of investing in and developing raw land. During the 1960's the company acquired numerous parcels of raw land which it held as investment or to subdivide and to resell. In the 1970's, the Company began to diversify its activities. This was accomplished through a series of mergers. The company engaged in manufacturing operations related to plastic printing plates for the newspaper industry, gaskets, seals and hydraulic and pneumatic tools and supplies in subsidiaries known as Dyna-Flex International Corporation, Basic American Corporation and New Draulics, Inc., and the name of the company was changed to Dynamic American Corporation in order to reflect the diversification of business in which it was then becoming involved. At this time emphasis was again shifted to real estate operations. Through various purchases and acquisitions by merger the Company continued to build up its real estate holdings for the next decade, while at the same time engaging in vigorous efforts to market and sell subdivided parcels of land and larger unsubdivided tracts. During 1983, the Company formed Camelot International Resort corporation and transferred land holdings located in Duchesne County, Utah into this subsidiary company. The Company then began development of Camelot Resort as a Private Membership camping resort. Membership sales began in 1985. The subsidiary was sold at the end of 1990. Manufacturing operations continued through 1984 after which time Dyna-Flex International Corporation and New Draulics, Inc. were sold. Through a subsidiary known as Dynamic Technologies Corporation, the Company again returned to manufacturing in 1988 initiated by the acquisition of the exclusive license to make, use and sell a certain patented air-suspended impact attrition mill ("attrition mill") which pulverizes and crushes ore and other materials. During 1989, the Company expended significant resources to develop the product and during this same year realized their first sales of the product. The attrition mill was marketed under the "Dyna-Mill" trademark. During 1991, the Company sold the attrition mill operation and, effective December 30, 1991, merged with Dynamic Technologies Corporation. These assets were reacquired by the Company in 1992. During 1990, the Company's main activity was in its real estate segment which was expanded to include sales of used modular housing. Due to the Company's historical operating losses combined with the tightened monetary policies of financial institutions, funding for the various real estate projects was difficult. This forced a delay and/or cancellation of various planned projects and generally negatively impacted the growth and development of the Company's business segments. Due in part to this pressure, the Company looked to accelerate sales of assets held for resale as a source to expand the business as opposed to borrowing. The Company packaged for sale the various assets being held for resale consisting of its modular housing inventory, long-term notes receivable, real estate held for resale and a partially completed real estate project together with related equipment. This sale was made to TLM Investments, Inc. (TLM) and was completed April 1, 1991 with an effective date of December 31, 1990. In 1991, the Company exchanged the note receivable for TLM for 10,000 tons of precious metal ore concentrates and entered into production arrangements with a third party (Century 2000 Corporation) to recover the precious metals from the ore concentrates using new techniques to break complex ores. During 1992, the Company incorporated an energy subsidiary DACO Energy Group and on June 30, 1992 it acquired natural gas assets totaling $2,126,500 by issuing 2,424,500 shares of the Company's common stock. In 1993, the Company exchanged these assets for an additional 25,000 tons of the ore concentrates. In 1994, the Company disposed of the assets relating to the attrition mill operation in settlement of a lawsuit and note payable to the inventor and seller. The Company has presently determined to pursue the processing and extraction of the precious metals in the ore concentrates. Pursuant to a shareholders meeting held in December 1994, wherein the Board of Directors were duly authorized by the shareholders, on June 22, 1995 the Company effected a reverse split of the Company's common stock on the basis of 1 for 20. Additionally, the Articles of Incorporation were restated to conform to current state law and raise the authorized common shares to 50,000,000 shares. The par value of the common shares was changed to $0.001, and the company authorized the creation of Preferred Share categories A, B and C with the preferences to be determined by the Board of Directors. Accompanying the reverse split was a change in the Company's trading symbol from DACO to DACQ and the issuance of a new Cusip Number which is 267843209. During the first quarter of 1996 the Board of Directors authorized an increase in common shares from 50,000,000 to 200,000,000. The par value remained the same. (B) Narrative description of business: On July 17, 1995 the Company entered into an agreement to acquire 100% of the assets of Bolivian Tin & Silver, S.A. The original agreement required the Company to issue 20,000,000 class A convertible preferred stock, for a total purchase price of $43,268,878. The entire transaction with Bolivian Tin & Silver Company, per the contract, was in escrow until September 18, 1995 or earlier as determined by management of the Company. The escrow period provided the Company the opportunity to conduct and conclude due diligence procedures to determine the production and profitability of the mines and smelter. As of September 18, 1995, on the motion of the president, Alan Burton, the Company closed escrow and concluded the acquisition. Pursuant to the instructions of Bolivian Tin & Silver, during the fourth quarter of 1995, all of the class A convertible preferred shares have been converted to common shares. Accordingly, the Company has issued 20,000,000 common shares per the instructions of Bolivian Tin & Silver. During the fourth quarter of 1995, it became apparent that the value of the Company's common shares was rapidly declining as reported on the OTC Electronic Bulletin Board, where bid and ask prices for the Company's common shares are quoted. The result was that the value of the holdings of Bolivian Tin & Silver in the Company had fallen well below the value of the assets conveyed to the Company. Further, such events had created a tremendous burden for Bolivian Tin & Silver to the extent that Bolivian Tin & Silver had suggested to the Company, they might have sought recision of the asset purchase agreement. After consideration, the Board agreed to issue 1,000,000 Class B convertible preferred stock to Bolivian Tin & Silver with the following provisions: a. Each share has a face and redemption value of $38.00 per share. b. Each share shall earn a non-cumulative dividend of three (3%) percent. c. Each share is convertible for the Company's common stock at any time, upon request and notice of Bolivian Tin & Silver, and such conversion shall occur at the average bid and ask price on the day of said conversion. Each preferred share shall be converted for as many common shares as are necessary to retire the preferred share at its face redemption value (bid and ask price is determined in the public market place for the Company's shares on the NASDAQ OTC Electronic Bulletin Board, operated by the National Association of Securities Dealers in the United States). d. The convertible preferred shares shall have no voting rights. e. The convertible preferred shares shall be preferred over all common shareholders in the event of liquidation of the assets of the Company up to their face or redemption value. f. The Company may redeem such shares at any time after ten (10) years from the date of issuance for their face and redemption value if the shares have not been converted into common shares. Item 2. Properties ----------- On July 17, 1995 the Company entered into an agreement to acquire 100% of the assets of Bolivian Tin & Silver, which includes all of the assets of Operaciones Metalurgicas, a tin smelting operation located in Oruro, Bolivia, and 100% of the property rights in the Monte Blanco mining group, 100% of the property rights in the Chojnacota mining group and 100% of those rights owned pursuant to the Cabo Piroja lease/purchase contract. The tin smelter is operational and was under the control of the same family for over 50 years until acquired by Bolivian Tin & Silver. Most of those years the tin smelter produced a profit. Recently, the smelter was retro- fitted with German State-of-the-art equipment, which makes it one of the only, if not the only, smelter in the world capable of processing low grade tin concentrates. Management of the acquired companies have represented that a three phase capital investment program could bring total revenue of the mines and smelter to a level that exceeds $37,000,000 per year, with about a 50% net operating margin. The entire transaction, per the contract, was in escrow until September 18, 1995. The escrow period was to provide the Company the opportunity to conduct and conclude due diligence procedures to determine the production and profitability of the mines and smelter. During the escrow period, Alan Burton, president of the Company at that time, directed the efforts of certain consultants and professionals conducting due diligence procedures for the Company. Based on gathered information and industry experience, Mr. Burton has prepared a report regarding the viability of the acquisition. Based upon the report, the input of professionals and consultants and the action of the Board of Directors, the transaction has been concluded and the acquisition is complete. A copy of Mr. Burton's report was an exhibit to the Company's 10-Q filing for the period ending June 30, 1995. Item 3. Legal Proceedings ----------------- On September 30, 1995 the Company had no pending litigation. Item 4. Submission of Matters to a Vote of Security Holders ---------------------------------------------------- No matters were placed before the shareholders for a vote during the fiscal year ending September 30, 1995. PART II Item 5. Market for the Registrant's Common Stock and Related Stockholders Matters ------------------------------------------------------------------ (a) Market information - The principal market on which the Company's common stock is traded is the National Association of Securities Dealers Automated Quotations System (NASDAQ Electronic Bulletin Board) under the symbol of DACQ. The following is market information for the stock (quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions): 1995 Low Bid High Bid -------------- --------- ---------- 1st Quarter $ .06 $ .06 2nd Quarter $ .06 $ .06 3rd Quarter $ .75 $8.86 1994 Low Bid High Bid -------------- ---------- ---------- 1st Quarter .06 .06 2nd Quarter .06 .06 3rd Quarter .06 .06 4th Quarter .06 .06 1993 Low Bid High Bid -------------- ---------- --------- 1st Quarter .25 .50 2nd Quarter .188 .50 3rd Quarter .188 .50 4th Quarter .06 .06 (b) Shareholders - The number of shareholders of record of the Company's common stock on July 10, 1996 is approximately 3,408. (c) Dividends - No cash dividends have been declared by the Company for the two most recent fiscal years. Item 6. Selected Consolidated Financial Data ---------------------------------------- In Thousands Except Per Share Amounts -------------------------------------- Sept. 30 December 31, 1995 1994 1993 ---------- -------- ---------- Revenues $ - $ - $ - Income (loss) from continuing operations (172) (56) (109) Income (loss) from discontinued operations -0- 117 -0- Income (loss) from continuing operations per common share (.28) (.15) (.28) Total assets at year end 47,544 4,346 4,680 Notes and contracts payable 309 300 650 Cash dividends per share None None None * NOTE - The figures for the year 1995 are recorded as of September 30, as the Company elected to change its fiscal year end to September 30, 1995 to coincide with the fiscal year end of its operating subsidiaries in Bolivia. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -------------------------------------------------------------- A major factor which management considers in evaluating the financial condition and liquidity of the company is its debt structure. Management emphasizes maintaining a low debt level to increase the liquidity and stability of the Company in an uncertain economic environment. The Company's level of debt is shown by the following ratios: Leverage Ratios 1995 1994 1993 ---------------- ------- ------- ------ Debt to assets 10.6% 8.6% 16.0% Total debt to equity 955.4% 9.4% 19.0% It should be noted that the total debt-to-equity ratio is effected by the "mezzanine" booking of $38,000,000 in convertible preferred shares outstanding. The Company considers these shares equity. In time the Company believes that such shares shall be recorded as equity by its auditors. If this were to occur, the total debt-to-equity ratio would be 11.9%. Capital Requirements - ---------------------- Conclusion of the acquisition of the assets of Bolivian Tin & Silver has created a condition wherein the Company will require capital to maximize the value of the investment in the acquired assets. Currently management is considering possible capital requirements of up to $10,000,000 for general capital improvements to enhance the overall viability and profitability of the projects. Generally it is considered by management that the investment, if made, would be expended as follows: (a) About $2,000,000 for capital improvements and operating capital for the tin smelter. Of this amount, $500,000 would be invested in a revolving concentrate purchase fund. This revolving concentrate purchase fund, if funded, is expected to dramatically increase revenues and earnings of the tin smelter. It should be noted that pursuant to certain arrangements with the German corporation, $200,000 was deposited in the revolving concentrate purchase fund as of January, 1996. The result was an immediate increase in revenue to annual rate of $6,000,000 per year. (b) About $5,000,000 invested in mine and mill development to increase the likelihood of a continuing long-term stream of tin concentrates for the smelter. (c) About $3,000,000 in a hydro-electric generation plant. Such an investment, if funded, could substantially reduce the overall cost of electricity, a major cost of tin production. It is estimated that electrical cost would be reduced from $0.07 per KWH to $0.01 per KWH. Experts who have visited the site indicate a high likelihood that there is sufficient natural resource energy to make a hydro-electric generation plant feasible. Except as described below, the Company has no firm plans as to how it could obtain sufficient capital to maximize its investment and meet the afore- described capital requirements. At this time, the following options are being considered by management, together with investment bankers and other consultants: (a) Public offering of shares to raise equity capital. (b) Borrowing. (c) Private placements. (d) Sale of convertible debentures or debt instruments. At the time of publication of this report, the Company has made some progress on its capital requirement as follows: (a) A subsidiary of the Company has entered into an agreement with a German corporation, whereby the German corporation has delivered $1,000,000 cash to the Company's subsidiary in exchange for right to purchase a minority interest in the Company's tin smelter in Bolivia. (b) The Company has received an offer with Vanity A.V.V. Aruba for $11,000,000 in financing in exchange for 25% of the Company's outstanding shares and 30% of the Company's Bolivian assets. This offer is subject to satisfactory completion of an on-site inspection of the Company's assets in Bolivia and satisfactory completion of a contract memorializing the agreement between the parties. These undertakings have commenced at the time of publication of this report. (c) The Company, from time to time, has issued shares for services and in consideration of private placements to meet on-going operating expenses and capital expenditures. Results of Operations - ---------------------- This report includes the Company's first audited financial statement for the period ending only a few days after the dynamic and sweeping reorganization of the Company's structure and assets. Accordingly, revenue and earnings or losses that are a result of the afore described reorganization will be reported in subsequent quarterly and annual reports. Effect of Recently Issued Financial Accounting Standards - --------------------------------------------------------- For a discussion of the effect of recently issued financial accounting standards, see note 2 of notes to financial Statements. Item 8. Financial Statements and Supplementary Data -------------------------------------------- See financial statements and supplementary financial data listed in Item 14. Change in Fiscal Year End. The Company elected to change the fiscal year end from December 31 to September 30. The purpose of this change is for the financial statement of the Company to coincide with its fiscal year end of its operating subsidiaries in Bolivia. The accompanying financial statements are for the nine months ended September 30, 1995. Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure -------------------------------------------------------------- There were no changes in or disagreements with accountants on accounting and financial disclosure. PART III Item 10. Directors and Executive Officers of the Registrant ------------------------------------------------------ (a) Identification of the Directors Became Position Name of Director Age Director with Company ------------------ ---- ----------- -------------- Jethro J. Barlow 44 1991 President J. Edwards Cox 60 1995 Vice President Directors serve until successors are elected. (b) Identification of Executive Officers Served Name Age Position As Such Since ---------------- ----- -------------- -------------- Jethro J. Barlow 44 President 1991 J. Edwards Cox 60 Vice President 1995 (c) Identification of certain employees Fernando Pero, who is responsible for operations and development at the Company's Bolivian subsidiaries, is a key employee. His family owned and operated the same properties prior to their sale to Bolivian Tin & Silver in 1995. (d) Business Experience (1) Jethro J. Barlow has been involved in business management since 1970 and has served in various positions with privately held corporations. He holds a Bachelors degree in Business Administration, Associates Degrees in Accounting and Marketing, and has been a practicing Certified Public Accountant in the State of Utah since 1976. (2) J. Edwards Cox, age 60, has been involved with the Company since 1995. He serves as both Vice President and Director. Since the resignation of Alan Burton, former President, Mr. Cox has been acting President pursuing those duties formerly performed by Mr. Burton. Mr. Cox operates a computer software company entitled Financial Planning Systems which sells custom computer software to financial planners and insurance agents. He has also been involved in various other business enterprises throughout his life. (e) Involvement in certain legal proceedings - There have been no events under any bankruptcy act, no criminal proceedings and no judgements or injunctions material to the evaluation of the ability and integrity of any director/ executive officer during the past five years. Item 11. Executive Compensation ------------------------ (a) Cash compensation (1) No Officer or Director was compensated in an amount over $50,000 during the year 1995. (2) Bonuses and deferred compensation - None (b) Compensation pursuant to plans: (1) None (2) None (3) None (4) None (c) Other compensation - None Item 12. Security Ownership of Certain Beneficial Owners and Management --------------------------------------------------------------- (a) Security ownership of certain beneficial owners: Number Name and Address of Shares Percent of Title of Class of Beneficial Owner Owned Class -------------- ------------------- ---------- ------------ Common Jethro J. Barlow 193,676 .005% P.O. Box 549 Hildale, Utah 84784 (b) Security ownership of management - see (a) above (c) Change in control - The largest shareholder of the Company is Bolivian Tin & Silver. Item 13. Certain Relationships and Related Transactions ------------------------------------------------- (a) Transactions with management and others - None (b) Certain business relationships - None (c) Indebtedness of management - None Item 14. Exhibits, Consolidated Financial Statement Schedules and Reports on Form 8-K ------------------------------------------------------------ (a) The following documents are filed as part of this report: (1) Financial Statements and Report of Independent Public Accountants F-1 to F-13 Financial Statements Schedules: Schedule II (Rule 12-03) - Amounts Receivable from Related Parties for the nine months ended September 30,1995, and the years ended December 31, 1994 and 1993. F-14 Schedule V (Rule 12-06) - Property Plant and Equipment for the nine months ended September 30,1995, and the year ended December 31, 1994. F-15 Schedule VI (Rule 12-09) - Valuation and Qualifying Accounts for the nine months ended September 30, 1995, and the years ended December 31, 1994 and 1993. F-16 Schedule X (Rule 12-11) - Supplementary Income Statement Information for the nine months ended September 30, 1995, and the years ended December 31, 1994 and 1993. F-17 Schedules other than those listed above are omitted because of the absence of conditions under which they are required or because the information is shown in the financial statements. (2) Exhibits -------- i Articles of incorporation and by-laws (*) ii Material contracts iii Consent of Jones, Jensen & CO. CPA's