8-K/A 1 form8ka-1202.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------------------------------------------- Date of report: October 2, 2003 ------------------------------- (Date of earliest event report) NORTH AMERICAN LIABILITY GROUP, INC. f/k/a STANDFIELD EDUCATIONAL ALTERNATIVES, INC. ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Florida ---------------------------------------------- (State or other jurisdiction of incorporation) Florida 333-40110 65-0386286 --------------------------------------------------------------------------- State or other jurisdiction (Commission File No.) (I.R.S. Employer Of incorporation) Identification No.) 11891 U.S. Highway One, Suite 100, North Palm Beach, Florida 33408 --------------------------------------------------------------------------- (Address of principal executive offices) Registrant's telephone number including area code 561-767-7761 ------------------------- Item 1. Changes in Control of Registrant ------ -------------------------------- As stated in the Form 8-K file October 2, 2003, on that date, the Registrant (or "the Company") completed a triangular merger with Nor- American Liability Corporation. Nor-American was a newly formed Florida corporation that was created to support the development of captive insurance programs and had no revenues as of the date of the merger. At the closing, the Company acquired all of Nor-American's issued and outstanding shares of common stock in exchange for 160,000,000 "unregistered" and "restricted" shares of the Company's common stock. The exchange was on a 16 for 1 basis, with Nor-American having 10,000,000 shares of common stock issued and outstanding. As a result of the Merger, Nor-American became a wholly owned subsidiary of the Company. The Company, through its new subsidiary, will provide services to professional groups seeking to obtain affordable professional liability insurance rates through the creation of captive insurance companies. The company's services are anticipated to include evaluation, development, and management of captive insurance programs. The market for captive insurance programs has grown over the past thirty years in response to increases in the cost of medical liability insurance and related litigation. The company will seek physicians, attorneys, condominium associations and other business and professional groups in similar industries to assist in the creation and management of captive insurance programs. The controlling shareholder of Nor-American Liability Corporation was Bradley Wilson, and pursuant to the terms of the Plan and Agreement of Merger, the shareholders of Nor-American Liability Corporation received 160,000,000 shares of common stock of the Registrant. Taking into account a forward split of the 2001A Convertible Preferred Stock, and the issuance of new stock pursuant to the terms of the merger, and assuming conversion of all of the outstanding shares of 2001A Convertible Preferred Stock, the former shareholders of Nor-American Liability Corporation own 51.4% of the common stock of the Registrant on a fully diluted basis. The transaction involved the retirement and cancellation of shares of 2001A Convertible Preferred Stock equivalent to 96,875,000 shares of common stock, which was owned by John W. Bylsma, the former controlling shareholder. Mr. Wilson presently owns or controls 50.8% of the common stock of the Company, assuming full conversion of all outstanding preferred stock. The source of the consideration use by the Nor-American stockholders to acquire their interest in the Company was the exchange of their respective shares of the outstanding securities of Nor-American. The primary basis of the "control" by the Nor-American stockholders is stock ownership and/or management positions. In accordance with the Plan and Agreement of Merger the following actions took place: 1. The issuance of 160,000,000 "unregistered" and "restricted" shares of the Company's common stock in exchange for all of Nor-American's issued and outstanding shares of common stock. The exchange was on a 16 for 1 basis, with Nor-American having 10,000,000 shares of common stock issued and outstanding. As a result of the Merger, Nor-American became a wholly owned subsidiary of the Company. 2. The cancellation of the equivalent of 96,875,000 shares of 2001A Convertible Preferred Stock owned by the Company's director and sole officer, as outlined above. 3. The issuance of 56,625,000 shares of "unregistered" and "restricted" common stock to holders of 2001A Convertible Preferred Stock, which does not include any issuance in connection with any of the shares referred to in paragraph 2 above. 4. A forward split of the remaining 2001A Convertible Preferred Stock, such at 94,375,000 shares of 2001A Convertible Preferred Stock remain issued and outstanding, which are convertible one-for-one for common stock of the Company. 5. The Company changed its name to "North American Liability Group, Inc." Item 7. Financial Statements and Exhibits. ------ --------------------------------- Pro forma financial information. The following pro forma financial information is included in this amendment: Description ----------- Unaudited Pro Forma Combined Financial Statements of Stanfield Educational Alternatives, Inc. and Nor-American Liability Corporation Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: December 2, 2003 NORTH AMERICAN LIABILITY GROUP, INC. /s/Bradley Wilson ---------------------------------- By: Bradley Wilson It's: President STANFIELD EDUCATIONAL ALTERNATIVES, INC. AND SUBSIDIARY (A Development Stage Company) Unaudited Pro Forma Combined Condensed Balance Sheet October 2, 2003

STANFIELD EDUCATIONAL ALTERNATIVES, INC. AND SUBSIDIARY (A Development Stage Company) Unaudited Pro Forma Combined Condensed Statements of Operations For the year to date period ended October 2, 2003

STANFIELD EDUCATIONAL ALTERNATIVES, INC. AND SUBSIDIARY (A Development Stage Company) Unaudited Pro Forma Combined Condensed Statements of Operations For the period from March 23, 1999 (inception) to October 2, 2003

STANFIELD EDUCATIONAL ALTERNATIVES, INC. AND SUBSIDIARY (A Development Stage Company) Unaudited Pro Forma Combined Condensed Statements of Cash Flows For the year to date period ended October 2, 2003

STANFIELD EDUCATIONAL ALTERNATIVES, INC. AND SUBSIDIARY (A Development Stage Company) Unaudited Pro Forma Combined Condensed Statements of Cash Flows For the period from March 23, 1999 (inception) to October 2, 2003

(1) Summary of Significant Business and Accounting Policies (a) Organization ------------ In December 1999, Innovative Technology Systems, Inc. ("Innovative") authorized and entered into an agreement effecting a tax-free exchange in a reorganization pursuant to IRS Code 368(a)(1)(A). Pursuant to the agreement, Innovative exchanged one share of its previously authorized but unissued shares of no par common stock in exchange for two shares of Stanfield Educational Alternatives, Inc. ("Stanfield") common stock. In accordance with the agreement, Innovative acquired all of the issued and outstanding shares of Stanfield in exchange for shares of Innovative. For accounting purposes, the acquisition has been treated as an acquisition of Innovative by Stanfield and as a recapitalization ("Reverse Acquisition") of Stanfield. Subsequent to the recapitilization, Innovative changed its name to Stanfield Educational Alternatives, Inc. and is herein referred to as the Company. On October 2, 2003, Stanfield completed a triangular merger with Nor-American Liability Corporation. Nor-American is a newly formed Florida corporation that was created to support the development of captive insurance programs. Nor- American is a development stage company that has received no revenues to date. At the closing, the Company acquired all of Nor-American's issued and outstanding shares of common stock in exchange for 160,000,000 "unregistered" and "restricted" shares of the Company's common stock. The exchange was on a 16 for 1 basis, with Nor-American having 10,000,000 shares of common stock issued and outstanding. As a result of the Merger, Nor-American became a wholly owned subsidiary of the Company. The Company, through its new subsidiary, will provide services to professional groups seeking to obtain affordable professional liability insurance rates through the creation of captive insurance companies. The company's services are anticipated to include evaluation, development, and management of captive insurance programs. The market for captive insurance programs has grown over the past thirty years in response to increases in the cost of medical liability insurance and related litigation. The company will seek physicians, attorneys, condominium associations and other business and professional groups in similar industries to assist in the creation and management of captive insurance programs. The controlling shareholder of Nor-American Liability Corporation was Bradley Wilson, and pursuant to the terms of the Plan and Agreement of Merger, the shareholders of Nor-American Liability Corporation received 160,000,000 shares of common stock of the Registrant. Taking into account a forward split of the 2001A Convertible Preferred Stock, and the issuance of new stock pursuant to the terms of the merger, and assuming conversion of all of the outstanding shares of 2001A Convertible Preferred Stock, the former shareholders of Nor-American Liability Corporation own 51.4% of the common stock of the Registrant on a fully diluted basis. The transaction involved the retirement and cancellation of shares of 2001A Convertible Preferred Stock equivalent to 96,875,000 shares of common stock, which was owned by John W. Bylsma, the former controlling shareholder. Mr. Wilson (1) Summary of Significant Business and Accounting Policies, Continued presently owns or controls 50.8% of the common stock of the Company, assuming full conversion of all outstanding preferred stock. The source of the consideration use by the Nor-American stockholders to acquire their interest in the Company was the exchange of their respective shares of the outstanding securities of Nor-American. The primary basis of the "control" by the Nor-American stockholders is stock ownership and/or management positions. The principal terms of the Plan and Agreement of Merger were: 1. The issuance of 160,000,000 "unregistered" and "restricted" shares of the Company's common stock in exchange for all of Nor-American's issued and outstanding shares of common stock. The exchange was on a 16 for 1 basis, with Nor-American having 10,000,000 shares of common stock issued and outstanding. As a result of the Merger, Nor-American became a wholly owned subsidiary of the Company. 2. The cancellation of 96,875,000 shares of 2001A Convertible Preferred Stock owned by the Company's director and sole officer, as outlined above. 3. The issuance of 56,625,000 shares of "unregistered" and "restricted" common stock to holders of 2001A Convertible Preferred Stock, which does not include any issuance in connection with any of the shares referred to in paragraph 2 above. 4. A forward split of the remaining 2001A Convertible Preferred Stock, such that 94,375,000 shares of 2001A Convertible Preferred Stock remain issued and outstanding, which are convertible one-for-one for common stock of the Company. 5. An agreement to change the name of the Company to "North American Liability Group, Inc." within thirty days of the closing of the Merger, which was effective on November 12, 2003. The Company is in its development stage and needs substantial additional capital to complete its development and to reach an operating stage. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, and therefore, will recover the reported amount of its assets and satisfy its liabilities on a timely basis in the normal course of its operations. See note 9 for a discussion of management's plans and intentions. (b) Principles of Consolidation --------------------------- The combined financial statements include the accounts of Stanfield Educational Alternatives, Inc. and its wholly owned subsidiary, Nor-American Liability Corporation, collectively referred to as the "Company". All significant accounts and transactions have been eliminated in the consolidation. (1) Summary of Significant Business and Accounting Policies, Continued (c) Revenue Recognition ------------------- The Company records revenue as earned when goods or services are provided. (d) Property and Equipment ---------------------- Property and equipment were stated at cost. Depreciation for financial statement purposes was computed using the straight-line method over the estimated useful lives of the individual assets, which range from 3 to 5 years. The Company has reviewed its long-lived assets and intangibles for impairment and recorded an impairment charge to write off all long-lived assets and intangibles during 2002. (e) Use of Estimates ---------------- The preparation of 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. (f) Income Taxes ------------ The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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. 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. (g) Loss Per Share -------------- Basic loss per common share amounts are computed by dividing the net loss for the period by the weighted average number of common shares outstanding for the period. Diluted loss per common share amounts reflect the potential dilution that could occur if convertible preferred shares are converted into common stock. No conversion is assumed if such conversion would have an antidilutive effect on diluted loss per common share amounts. (2) Recent Financial Accounting Standards In May 2003, the Financial Accounting Standards Board ("FASB") issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Management believes that the adoption of this Statement will have no material effect on the Company's financial position or results of operations. (3) Property and Equipment The Company's default on certain capital lease obligations and other events and circumstances in 2002 and 2001 indicated that the book value of certain long-lived assets may not be recoverable. During 2002, the tangible assets of the Company were determined to have no future value to the Company and were written off to expense. Depreciation expense for the year to date period ended October 2, 2003 was $0. (4) Intangible Assets During 2002, the intangible assets of the Company were determined to have no future value to the Company and were written off to expense. These assets were originally purchased from the National Children's Reading Foundation on December 30, 1999. The National Children's Reading Foundation is a not-for-profit company whose shares are held by Lawrence Stanfield, who was a substantial shareholder of Stanfield Educational Alternatives, Inc. These assets were being amortized utilizing the straight- line method over a five-year life. Amortization expense for the year to date period ended October 2, 2003 was $0. (5) Capitalization Prior to the Plan and Agreement of Merger described in Footnote 1(a), Stanfield's equity was comprised of the following: On September 1, 2003, the Company affected an one hundred-for- one reverse stock split. At October 2, 2003, the Company had issued 70,890 shares of common stock. On July 30, 2003, the Majority Shareholders and the Board of Directors approved amendments to the Articles of Incorporation which are designed to reorganize the capital structure of the Company. The Articles increased the total number of authorized common stock to 500,000,000 and the authorized preferred shares to 150,000,000. The 2,000,000 shares which were previously designated as Series 2001 Convertible Preferred Stock remain unchanged. At October 2, 2003, 22,100 of these shares were issued and outstanding. (5) Capitalization, Continued The Series 2001A Convertible Preferred Stock has been amended such that 100,000,000 shares are now designated as Series 2001A Convertible Preferred Stock. At October 2, 2003, 1,530,000 of these shares were issued and outstanding. The series that was previously designated as Series 2001B Convertible Preferred Stock has been abolished. A new series, designated as Class B Preferred Stock was created, the main feature of which is the existence of ten votes per share for each share of this series. At October 2, 2003, none of these shares were issued and outstanding. Prior to the Plan and Agreement of Merger described in Footnote 1(a), Nor-American's equity was comprised of the following: 10,000,000 shares of no-par value common stock issued and outstanding as of October 2, 2003. As described in Footnote 1(a) above, the following issuances and actions took place in connection with the Plan and Agreement of Merger: (i) The issuance of 160,000,000 "unregistered" and "restricted" shares of the Company's common stock in exchange for all of Nor-American's issued and outstanding shares of common stock. The exchange was on a 16 for 1 basis, with Nor- American having 10,000,000 shares of common stock issued and outstanding. As a result of the Merger, Nor-American became a wholly owned subsidiary of the Company. (ii) The cancellation of 96,875,000 shares of 2001A Convertible Preferred Stock owned by the Company's director and sole officer, as outlined above. (iii) The issuance of 56,625,000 shares of "unregistered" and "restricted" common stock to holders of 2001A Convertible Preferred Stock, which does not include any issuance in connection with any of the shares referred to in paragraph 2 above. (iv) A forward split of the remaining 2001A Convertible Preferred Stock, such that 94,375,000 shares of 2001A Convertible Preferred Stock remain issued and outstanding, which are convertible one-for-one for common stock of the Company. (6) Income Tax The Company has no provision for taxes as it has a net operating loss of approximately $4,080,000 that expires in varying times through 2022. No deferred asset has been recorded, as the possibility of benefiting from the net operating loss is dependent on the Company achieving profitable operations. (7) Related Party Transactions The president, current and former principal stockholders, and certain employees from time to time make advances to the Company. The advances have been made for financing and working capital purposes. At October 2, 2003, the total of such advances and accrued interest was $504,105. (8) Contingencies Due to its financial difficulties, the Company defaulted on a number of debt and lease obligations in prior years. The Company was evicted from its premises and several judgments totaling approximately $310,000 were issued against the Company. The Company is continuing in its efforts to resolve these obligations through settlements. However, there is no assurance that the Company will be able to settle in terms agreeable to the Company and if it does not do so, this will have a material adverse affect on the ability of the Company to operate properly in the future. (9) Going Concern Matters The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements, the Company has incurred cumulative losses of $4,080,019 during its development stage and has classified all of its debt as current. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is dependent upon its ability to obtain additional financing and ultimately to attain profitability. Because of the Company's inability to generate revenues from its operations, the company underwent a change in control and is no longer in the educational business. As of October 2, 2003, the success of achieving the objectives discussed above, as well as the ultimate profitability of the Company's operations, cannot be determined.

NORTH AMERICAN LIABILITY GROUP INC 8-K/A