U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB/A
AMENDMENT NO. 2
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
INTERACTIVE PROCESSING, INC.
(Name of Small Business Issuer in its charter)
NEVADA 88-0355407
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
#1738 - 609 GRANVILLE STREET, VANCOUVER, BRITISH COLUMBIA V7Y 1G5 CANADA
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (604) 689-4060
Securities to be registered under Section 12(b) of the Act: NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
(Title of class)
Exhibit index on page 23 Page 1 of 25 pages
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Interactive Processing, Inc. (the "Company") was incorporated under the
laws of the State of Nevada on September 15, 1995, for the purposes of engaging
in sales of consumer electronic products.
On April 17, 1996, the Company entered into a Patent and Trademark
License Agreement with Amoeba Corporation ("Amoeba") to obtain the exclusive
license to develop, manufacture, market, distribute, and sell products in the
United States, Canada, and Mexico based upon an invention and patents owned by
Ameoba. Amoeba was issued United States Patent number 5,253,068 and Canadian
Patent number 2,107,736. The invention, known as the TV Terminator ("TVT") is,
generally, an interactive universal remote control device, invented and patented
by Amoeba, that is believed by management of the Company to be the first remote
control with sound effects and a trigger-operated channel changer. As
consideration for the license, the Company issued 2,900,000 shares of its Common
Stock to Amoeba and agreed to pay a royalty of $1.50 per unit sold by the
Company. The agreement has no specified term.
Also on April 17, 1996, the Company entered into Patent and Trademark
Sublicense agreements with three licensees of Amoeba to obtain the exclusive
rights to the TV Terminator in other territories. All of the agreements are
similar to the agreement with Amoeba and differ only with respect to the
territory and the number of shares issued to the sublicensor. The agreements are
summarized below.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
LICENSOR/SUBLICENSOR TERRITORY ISSUED
<S> <C> <C>
Amoeba Corporation United States; Canada; and Mexico 2,900,000
But Sup But International Inc. Asia, excluding Russia and all republics which 900,000
were part of the former Soviet Union; India;
Australia; and New Zealand
Aurora Marketing Inc. All of Europe, including the United Kingdom; 900,000
Russia; and all republics which were part of the
former Soviet Union
Measca Corporation Western hemisphere, excluding the United 900,000
States, Canada, and Mexico; Africa; and the
Middle East
</TABLE>
The TV Terminator is a gold colored, gun shaped remote control, which
produces four sound effects: gunshot, machine gun, boos, and cheers. In addition
to the TVT, the Company plans to produce other products based on the TVT
technology and patents (collectively referred to as the "TVT Products"). See
Football Sport Remote and Bundy Sport Remote, described below. Pursuant to the
terms of the License and Sublicense agreements the rights to any TVT Products
developed by the Company belong to Amoeba. The TVT Products work with
Televisions, Video Cassette Recorders, and Cable Boxes, and have an operating
range of over fifty (50) feet.
The TVT was demonstrated by Amoeba at the Consumer Electronics Show in
Las Vegas, Nevada, in January 1996. Prior to the Company's acquisition of the
distribution rights, other distributors of the TVT had sold small quantities of
the product through catalogs and as a result of
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newspaper articles and radio announcements. One of these distributors was Golden
Treasures Dist. Ltd. ("Golden Treasures") a company owned and controlled by Mr.
Silverman.
Using the TVT technology, the Company developed a football shaped
product named the Football Sport Remote (the "FSP"). On July 16, 1996, the
Company entered into a Merchandising License Agreement with ELP Communications
for the exclusive license in the United States and Canada to use the trademarks
of the "Married With Children" television series to promote the Company's Bundy
Sport Remote product, which is the FSP sold in different packaging (the Bundy
Sport Remote and the Football Sport Remote are collectively referred to as the
"Football Remotes"). As consideration for the license, the Company agreed to pay
a royalty equal to 10% of Net Sales (12% of Net Sales for sales made on an
F.O.B. basis), and paid an advance of $25,000 to the licensor upon execution of
the agreement. The initial term of the agreement commenced on April 11, 1996 and
will expire on June 30, 1998, unless sooner terminated pursuant to the terms of
the agreement. So long as the Company has paid the licensor minimum royalties of
$75,000 during this initial term and notified the licensor of its intention to
extend the term of the agreement by May 1, 1998, the Company shall have an
option to extend the agreement for an additional period ending June 30, 2000. In
addition, subject to the Company performing fully under the terms of the
agreement, the Company has the option of extending the territory to encompass
worldwide rights by so notifying the licensor by May 12, 1997 and paying an
option fee of $25,000 by July 12, 1997.
As of March 10, 1997, the Football Remote prototypes have been made
along with pre-packaging. Tooling designs, to be used in the production of the
Football Remotes, have been completed, and the Company is awaiting confirmation
on the tooling schedule. Management estimates that eighty-five percent (85%) of
the software to be used in the Football Remotes is completed. While the Bundy
Sport Remote and the FSP are identical except for the packaging, the Company's
cost on the Bundy Sport Remote is at least one dollar higher per unit, than the
FSP, due to the licensing fee.
Management anticipates that the development of the Football Sport
Remote and the Bundy Sport Remote will be completed in May or June of 1997.
MARKETING AND DISTRIBUTION
The Company has been marketing the TVT to consumers and retailers for a
suggested retail price of $39.95. Management believes the Football Remotes will
be marketed at a similar price. Sales of the TVT Products will be made through
home television shopping channels, catalogs, and clubs, utilizing an 800 number
ordering system. Also, the Company has entered into a joint venture agreement
with Cable/Print Network Marketing, Inc. ("CPNM") to distribute and market the
TVT, FSP, and the Bundy Sport Remote. CPNM's expertise lies in marketing
products through television, home shopping networks, catalogs, and infomercials.
According to the CPNM agreement, the joint venture will be formed through a
Delaware corporation, and the Company will assist in the financing the initial
marketing. As of March 10, 1997, the Delaware corporation had not been formed,
and the initial contribution had not been raised.
As of March 7, 1997, the TVT had been advertised on the Down Home
Shopping Network, and the Company is awaiting approval from the HSN Home
Shopping Network. Management anticipates that the FSP and Bundy Sport Remote
will also be advertised on home shopping networks once these products are
completed. The Company also intends to advertise the TVT Products on the
Internet.
The Company receives the TVT Products from a manufacturer located
overseas (See Part I, Description of Business. Manufacturing) and warehouses the
units in Las Vegas, with Golden Gems Nevada, Ltd. ("Golden Gems"), until they
are shipped to the purchaser (e.g., home shopping networks, catalog sales
companies, distributors, home purchasers, etc.). Golden Gems is a company owned
by Mr. Silverman's parents. The Company has entered into a one year fulfillment
contract with Golden
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Gems, dated June 1, 1996, pursuant to which Golden Gems will receive from the
Company a fee of $5 per unit shipped to individual customers and $.50 on each
unit per fifty (50) piece bulk box of TVT's sent shipped to catalog companies
and home shopping networks and all bulk shipments sent F.O.B. The Company also
pays for any extra costs, such as envelopes, long distance faxing, special
mailings authorized by the Company and any other reasonable costs. In addition,
Golden Gems charges individual customers a $5.95 shipping and handling fee at
the time of shipment. Payment to Golden Gems is made at the end of the month,
based upon total orders for the month.
As of March 10, 1997, the Company had shipped approximately 2,000 units
of the TVT. The Company has an additional inventory of TVT 2,200 units available
for shipment. Depending upon consumer acceptance of the TVT, the Company may
have repeat orders and/or agreements for distribution of the product.
The Company is in negotiations with AIFA Technology Corp., a Taiwanese
company ("AIFA"), to expand the Company's line of remotes. As of March 7, 1997,
the Company's negotiations with AIFA have focused on the Company acquiring the
exclusive marketing rights in the United States and Canada for AIFA's EZ 5-in-1
and URC5 remotes. The Company is also negotiating with AIFA for an option on the
marketing rights in South America and Europe. As of March 7, 1997, no definitive
agreement had been entered into with AIFA.
Management is negotiating with Klaus Helbert Verlog GMBH, located in
Wiesbaden, German ("KHV"), for the distribution rights to the Company's TVT
Products. If the negotiations are successful, management anticipates a two year
agreement pursuant to which KHV will make an initial payment to the Company of
$100,000, plus guaranteed unit sales over the term of the agreement. As of March
11, 1997, the Company had not reach an agreement with KHV.
MANUFACTURING
The Company currently has the TVT manufactured overseas by Kimex
Electronic Co. of Seoul, Korea ("Kimex"), a non-affiliated company, and pays for
orders in advance. Microchips used in the TVT Products are purchased from Zilog,
which has offices in California and Asia. The Company experienced quality
control problems with the initial TVT orders from Kimex. A spring located inside
the TVT was not aligned properly, which caused problems with the TVT. These
problems have been corrected, and the Company has not experienced this problem
with subsequent TVT orders.
The Company has selected International Quartz Ltd. ("International
Quartz"), located in Hong Kong, to manufacturer the FSR and the BSR.
International Quartz has agreed to extend payment terms to the Company and will
guaranty delivery. Management and International Quartz are still negotiating the
final terms regarding payment. Management anticipates that the Company will make
an initial payment of approximately $10,000 to be applied towards tooling costs,
which should total approximately $30,000. The remaining tooling costs will be
paid over a period of approximately sixty days. As of March 12, 1997, the
payment terms for manufacturing the FSR and BSR had not been determined.
The Company does not anticipate any difficulties in obtaining raw
materials or arranging for the manufacture of its products.
COMPETITION
There are many companies which manufacture universal remote controls.
However, management believes that the TVT Products have a niche in the remote
control market, due to their ease of use, sound effects and unusual shapes. As
discussed above, the TVT Products have four sound effects, and are available in
the shape of a gun, or in the case of both the Football Remotes in
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the shape of a football. Management believes these shapes and sounds provide an
interactive experience for the user, which is unavailable with a standard
universal remote control.
GOVERNMENTAL REGULATION
The Company's products are not regulated by the Federal Communications
Commission or any other government agency. The Company is subject to laws and
regulations pertaining to the import of goods manufactured overseas. Compliance
with governmental regulations is not expected to have a material adverse effect
on the Company.
EMPLOYEES
As of March 10, 1997, the Company had 3 employees, 2 of whom were
full-time, and 1 independent contractor. The names and responsibilities of each
employee are set forth below:
Sheldon Silverman - President
Mr. Silverman is a full-time employee and is responsible for running
the day-to-day operations of the Company. Mr. Silverman is in charge of the
Company's marketing and product development, along with discussing the Company's
operations with investors. Mr. Silverman is also the Secretary of Golden
Treasures.
Keith Balderson - Vice President
Mr. Balderson, a part-time employee, is responsible for the management
of the Company, and makes recommendations regarding the Company's marketing,
financing, and contracting activities. Mr. Balderson also conducts investor
relations activities, which includes answering questions from investors and
preparing news releases. Mr. Balderson spends approximately five hours a week on
the business affairs of the Company.
Juliette Henry
Ms. Henry is a full time employee, and provides secretarial services to
the Company, including data entry and some accounting. Ms. Henry also provides
Internet experience.
Dave Jeffery
Mr. Jeffery is an independent contractor whose primary responsibility
is conducting investor relations activities. Mr. Jeffery also handles some of
the Company's sales calls. The Company does not have any contractual arrangement
with Mr. Jeffery.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATION
Management had planned to add two or three employees in the Company's
Vancouver offices, and staff a full-time office in Las Vegas, during the 1997
fiscal year, which ends April 31, 1997. However, due to a lack of funding,
management has decided to postpone these plans indefinitely. The Company also
plans to continue its research and development efforts on the TVT Products. As
of March 6, 1997, management estimates that the Company has sufficient cash to
satisfy its needs until May 1, 1997.
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<PAGE>
In August 1996, the Company completed a $170,000 private placement of
its Common Stock, pursuant to Rule 504 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act") . From August 1996 to January 24,
1997, the Company made a $0.36 per share offering under Rule 504 of Regulation
D; however, no shares were sold as a result of this offering. The Company
proposes to conduct a $0.20 per share offering, under Rule 506 of Regulation D
promulgated under the Act. As of March 10, 1997, the Company had not sold any
shares in this offering.
Currently, orders placed with Kimex are paid for in advance of
shipment. In the future, the Company would like establish a line of credit with
Kimex for the financing of inventory purchases. Interest of 10% per annum would
be charged on such financing. The Company is also completing negotiations with
International Quartz regarding the extension of payment terms for the tooling
and manufacturing costs of the Football Remotes. See Part 1, Item 1. Description
of Business.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES. Since the Company's inception in
September 1995, the Company has been engaged primarily in raising its initial
capitalization and obtaining license agreements critical to its business plan.
Through April 30, 1996, gross proceeds of $225,700 were obtained through the
sale of the Company's Common Stock. In August 1996, an additional $170,000 in
gross proceeds were obtained through the sale of the Company's Common Stock,
pursuant to Rule 504 of Regulation D promulgated under the Act. See Part II,
Item 4. Recent Sales of Unregistered Securities.
The Company's working capital was $19,663 at April 30, 1996, and
increased to $32,372 at October 31, 1996. The increase was due primarily to the
receipt of the offering proceeds described above.
RESULTS OF OPERATIONS. The Company has not yet generated significant
revenues. Since inception revenues of only $7,504 have been generated. Expenses
incurred since inception through October 31, 1996 of $360,301 were primarily for
marketing and product development, including tooling designs and the production
of prototypes and premarketing materials. The research and development on the TV
Terminator has been completed. Management believes the development costs on the
Football Sport Remote and the Bundy Sport Remote should be minimal due to the
similarity of the software between the TVT and the Football Remotes; however,
the Company will continue to incur marketing costs. If the negotiations with
AIFA are successful, the Company may incur development and marketing cost on
these products in the near future.
Expenses for the six months ended October 31, 1996 in the amount of
$186,684 were incurred primarily for consulting fees ($45,957), investor
relations ($24,569), legal ($18,972), office ($18,717), and marketing and
product development ($46,598). Consulting services were provided to the Company
by S.A. Alden Holdings, Inc. ("S.A. Alden"), a company owned by Mr. Balderson's
wife. S.A. Alden provides the Company with management and contract negotiations
expertise. The Company also received consulting services relating to
distribution of the Company's products from Golden Treasures, a company owned
and controlled by Sheldon Silverman. During the six months ended October 31,
1996, the Company had paid $22,500 to Golden Treasures and $10,858 to S.A.
Alden. The Company's investor relations activities include providing answers to
investors' questions which are received by telephone, mail, fax, and electronic
mail. Expenses for investor relations consist primarily of the associated costs
for travel and lodging and the fees paid to Mr. Jeffery, an independent
contractor.
GOING CONCERN. As a result of its operations through October 31, 1996,
the Company has an accumulated deficit as of October 31, 1996 of $361,759. Note
1 of the Notes to Financial Statements included herein states that substantial
doubt has been raised about the Company's ability to continue as a going
concern. The ability of the Company to continue as a going concern is dependent
on its
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ability to generate profitable operations in the future and obtain additional
financing. Management plans to raise the funds, through the issuance of
additional shares of stock (See Part I, Item 2. Plan of Operation), necessary to
finance ongoing operations and commitments until sufficient cash flow from
operations is generated; however, there can be no assurance that the Company
will be able to do so.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's leases approximately 600 square feet of office space at a
cost of $750 per month, at #1738 - 609 Granville Street, Vancouver, British
Columbia. See Part I, Item 7. Certain Relationships and Related Transactions.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table provides certain information as to the officers and
directors individually and as a group, and the holders of more than 5% of the
Common Stock of the Company, as of August 21, 1996:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF OWNER NUMBER OF SHARES PERCENT OF
OWNED CLASS (1) <F1>
<S> <C> <C> <C>
Amoeba Corporation Contact/Director: 2,900,000 30.8%
21 East Drive Garston Isaac Collie
Watford, Herts
England WD2 6AH
Philadep & Co. 1,832,500 19.5%
1900 Market St. 2nd Floor
Philadelphia, PA 19103
But Sup But International Inc. Contact/Director: 900,000 9.6%
Flat 1906, Blk Q Janine Curtis
Luk Yeung Sun Chuen
Twuen Wan
N.T. Hong Kong
Aurora Marketing Inc. Contact/Director: 900,000 9.6%
21 Godolphin House Shaniqua McPhee
76 Fellows Road
London, England
NW3 3LG
Measca Corporation Contact/Director: 900,000 9.6%
P.O. Box N. 7521 Shelly Johnson
94 Dowdeswell St.
Nassau, Bahamas
CT Securities Services Inc. 822,500 8.7%
70 York St. 8th Floor
Toronto, Ontario
Canada M5J 1S9
Sheldon Silverman 300,000 (2)<F2> 3.1%
Keith Balderson 200,000 (3)<F3> 2.1%
Officers and Directors as a group 500,000 5.0%
(2 persons)
*Less than 0.1%
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<FN>
<F1>
(1) Based on 9,419,000 shares of Common Stock outstanding on August 21,
1996. Where the persons listed on this table have the right to obtain
additional shares of common stock within 60 days from August 21, 1996,
these additional shares are deemed to be outstanding for the purpose of
computing the percentage of class owned by such persons, but are not
deemed to be outstanding for the purpose of computing the percentage of
any other person.
<F2>
(2) Includes 300,000 shares of Common Stock issuable upon exercise of
certain options. See "Executive Compensation."
<F3>
(3) Includes 200,000 shares of Common Stock issuable upon exercise of
certain options. See "Executive Compensation."
</FN>
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
The officers and directors of the Company are as follows:
NAME AGE POSITION
<S> <C> <C>
Sheldon Silverman 35 President, Chief Executive Officer
and Director
Keith Balderson 52 Vice President, Secretary, Treasurer
and Director
</TABLE>
The term of office of each director of the Company ends at the next
annual meeting of the Company's stockholders or when such director's successor
is elected and qualifies. No date for the next annual meeting of stockholders is
specified in the Company's Bylaws or has been fixed by the Board of Directors.
The term of office of each officer of the Company ends at the next annual
meeting of the Company's Board of Directors, expected to take place immediately
after the next annual meeting of stockholders, or when such officer's successor
is elected and qualifies.
SHELDON SILVERMAN is a full-time employee and has been the President,
Chief Executive Officer, and a director of the Company since May 1996. He
managed a jewelry store in Vancouver, British Columbia, from 1982 to 1984. In
1986, Mr. Silverman received a real estate license and worked at Re/Max Realty
in Vancouver, from 1986 to 1994, specializing in land development, as well as
residential and commercial real estate. He received awards as a real estate
broker. From 1991 to 1996, he was the president of Golden Treasures Dist. Ltd.,
a distributor of consumer electronic products. Mr. Silverman assisted in the
development of the Company's TVT Products and in locating software engineers,
product manufacturers, and microchip designers. Mr. Silverman's parents are the
owners of Golden Gems.
KEITH BALDERSON has been a director of the Company since its inception
and has served, on a part-time basis, as Vice President since May 1996 and
Secretary and Treasurer since July 1996. He served as the President of the
Company from its inception to May 1996. Mr. Balderson is employed by S.A. Alden,
which is located in Vancouver, British Columbia. S.A. Alden is owned by Mr.
Balderson's wife, who is also the President of S.A. Alden. Mr. Balderson
attended sales and marketing courses at the University of British Columbia from
1963 to 1965. From 1965 to 1982, he was a director of Margetson-Lee, Ltd., a
private retail clothing company in Vancouver, British Columbia. He was the
president of Silk Fashion Canada, Ltd., Toronto, Ontario, a company which
imported Jack Mulgreen dresses and blouses, from 1980 to 1984. From 1984 to
1988, he was the marketing director for Louis Feraud Paris, a private fashion
import company in New York. He was the vice
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president for Quadra Lodgic Technologies, Inc., a medical research and
biotechnology company in Vancouver, British Columbia, from 1988 to 1992. From
1992 to 1996, Mr. Balderson was the president of Cryocon Containers Inc., a
publicly-held company in Vancouver, British Columbia, engaged in refrigeration
technology.
As of March 10, 1997, the Company has not entered into any consulting
agreements with Messrs. Silverman or Balderson. The Company has entered into
consulting agreements with S.A. Alden and Golden Treasures, companies owned by
Mr. Balderson's wife and Sheldon Silverman, respectively. These consulting
agreements are attached as exhibits to this document.
ITEM 6. EXECUTIVE COMPENSATION.
The following table sets forth information for the Chief Executive
Officer ("CEO") of the Company, Keith Balderson, from inception (September 15,
1995) through April 30, 1996. No disclosure need be provided for any executive
officer, other than the CEO, whose total annual salary and bonus for the last
completed fiscal year did not exceed $100,000. Accordingly, no other executive
officers of the Company are included in the table.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
OTHER RESTRICTED
NAME AND ANNUAL STOCK OP- LTIP ALL OTHER
PRINCIPAL COMPEN- AWARD(S) TIONS/SAR PAYOUTS COMPEN-
POSITION YEAR SALARY BONUS SATION ($) ($) S ($) ($) SATION ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Keith 1996 $ 14,400 -0- -0- -0- -0- -0- -0-
Balderson,
President
</TABLE>
There are no employment agreements with any of the Company's executive
officers. The Company's current executive officers, Sheldon Silverman and Keith
Balderson, are paid through consulting fees paid to their respective companies.
The consulting fees are currently $4,000 and $1,200 per month for Messrs.
Silverman and Balderson, respectively. For period ended April 30, 1996,
consulting fees of $8,000 and $10,301 were paid to Messrs. Silverman and
Balderson through their companies. For the six months ended October 31, 1996,
consulting fees of $22,500 and $10,858 were paid to Messrs. Silverman and
Balderson through their companies. From May 1, 1996 through March 1, 1997,
management estimates that the Company had paid $27,500 and $ 13,500, to Messrs.
Silverman and Balderson through their companies, and they are owed $14,500 and
$3,000, respectively.
The Company does not pay non-officer directors for their services as
such nor does it pay any director's fees for attendance at meetings. Directors
are reimbursed for any expenses incurred by them in their performance as
directors.
STOCK OPTIONS
On July 26, 1996, the Company's Board of Directors adopted a 1996 Stock
Option Plan under which a total of 941,900 shares are available for grant to
provide incentive compensation to officers and key employees of the Company.
The Plan is administered by the Board of Directors. Options may be
granted for up to 10 years at not less than the fair market value at the time of
grant, except that the term may not exceed five years and the price must be 110%
of fair market value for any person who at the time of grant owns more than 10%
of the total voting power of the Company. Unless otherwise specified in an
optionee's
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agreement, options granted under the Plan to officers, officer/directors, and
employees will become vested with the optionee under the following schedule: 50%
upon the first anniversary of the option grant and 12.5% upon each of the four
three-month periods following the first anniversary. The Plan will remain in
effect until it is terminated by the Board of Directors, except that no
Incentive Stock Option (as defined in Section 422 of the Internal Revenue Code)
may be granted after July 26, 2006.
Options may be exercised by payment of the option price (i) in cash,
(ii) by tender of shares of Common Stock of the Company and which have a fair
market value equal to the option price, or (iii) by such other consideration as
the Board of Directors may approve at the time the option is granted.
On August 16, 1996, options to purchase 300,000 shares and 200,000
shares at $.656 per share were granted to Sheldon Silverman and Keith Balderson,
respectively.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
From time to time, the Company has engaged in transactions with Golden
Treasures, a distributor of consumer electronic products owned and controlled by
Sheldon Silverman, the President, Chief Executive Officer, and a director of the
Company. The Company, pursuant to the consulting agreement between Golden
Treasures, receives the following services from Golden Treasures:
1. Project management.
2. Recommendations regarding financing, marketing and promotion.
3. Monitoring and verification of work performed by contractors.
4. Report writing.
5. Liaison services between the Company and contractors.
The terms of the consulting agreement provide that Golden Treasures has complete
discretion in the amount of time, energy, and effort devoted to the Company and
performs its duties to the Company as it sees fit. In exchange for the services,
the Company pays Golden Treasures a fee of $4,000 per month and reimburses
Golden Treasures for reasonable expenses. During the period ended April 30,
1996, the Company also purchased 60 units of the TVT from Golden Treasures at
cost ($18 per unit). Also during this period, the Company incurred $57,095 in
marketing expenses paid to Golden Treasures. The marketing expenses were related
to the Company's involvement in the Consumer Electronics Show in Las Vegas in
January 1996, for exhibit space, advertising, and prototype samples. The Company
leases office space from Golden Treasures at the rate of $750 per month. During
the period ended April 30, 1996, rent of $3,500 was paid. At April 30, $7,933
was owed to Keith Balderson's company and $12,580 was owed to Golden Treasures
for marketing, public relations, investor relations, and office expenses. During
the six months ended October 31, 1996, rent of $700 was paid. At October 31,
1996 $12,580 was still owed to Golden Treasures; however, as of March 1, 1997,
management estimates that $14,500 was owed to Golden Treasures and $3,000 was
owed to S.A. Alden.
The Company has contracted for fulfillment services with Golden Gems, a
company owned and controlled by Sheldon Silverman's parents. See Part I, Item 1.
Marketing and Distribution.
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<PAGE>
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value per share, and 5,000,000 shares of
Preferred Stock, $.001 par value per share.
COMMON STOCK
Each share of Common Stock has one vote with respect to all matters
voted upon by the shareholders. The shares of Common Stock do not have
cumulative voting rights.
Holders of Common Stock are entitled to receive dividends, when and if
declared by the Board of Directors, out of funds of the Company legally
available therefor. The Company has never declared a dividend on its Common
Stock and has no present intention of declaring any dividends in the future.
Holders of Common Stock do not have any preemptive rights or other
rights to subscribe for additional shares, or any conversion rights. Upon a
liquidation, dissolution, or winding up of the affairs of the Company, holders
of the Common Stock will be entitled to share ratably in the assets available
for distribution to such stockholders after the payment of all liabilities.
The outstanding shares of the Common Stock of the Company are fully
paid and non-assessable.
The registrar and transfer agent for the Company's Common Stock is
Silver State Transfer & Registrar, 8180 Clover Springs Lane, Salt Lake City,
Utah 84121.
PREFERRED STOCK
The Articles of Incorporation permit the Board of Directors, without
further shareholder authorization, to issue Preferred Stock in one or more
series and to fix the price and the terms and provisions of each series,
including dividend rights and preferences, conversion rights, voting rights,
redemption rights, and rights on liquidation, including preferences over the
Common Stock, all of which could adversely affect the rights of the holders of
the Common Stock.
The Board of Directors established a Series A Preferred Stock
consisting of 2,000,000 shares; however, it has withdrawn its plans to sell such
shares privately.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
The Company's Common Stock is not traded on a registered securities
exchange, or on NASDAQ; however, the Company's Common Stock has traded on the
OTC Bulletin Board under the symbol "IAPI" since April 29, 1996. The range of
high and low bid prices for each fiscal quarter for 1996, as reported by the OTC
Bulletin Board, is as follows:
<TABLE>
<CAPTION>
BID PRICES
1996 FISCAL YEAR HIGH LOW
<S> <C> <C>
Quarter Ending 07/31/96................................... $ 1.63 $ .343
Quarter Ending 10/31/96 .................................. $ 1.06 $ .250
</TABLE>
11
<PAGE>
The last reported high and low bid price for the Company's Common Stock
was $.18 as of March 7, 1997, as reported by the OTC Bulletin Board.
The above quotations reflect inter-dealer prices, without retail
mark-up, mark-down, or commission and may not necessarily represent actual
transactions.
As of February 24, 1997 there were 38 record holders of the Company's
Common Stock.
Since the Company's inception, no cash dividends have been declared on
the Company's Common Stock.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings and no such
proceedings are known to be contemplated.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Since the Company's inception, it has sold shares of its Common Stock,
which sales were not registered under the Securities Act of 1933, as amended, as
follows:
From October 1, 1995 to December 5, 1995, a total of 3,124,000 shares
of Common Stock were sold for an aggregate of $156,200 in cash. From March 28,
1996 to May 6, 1996, a total of 695,000 shares of Common Stock were sold for an
aggregate of $69,500 in cash. No underwriting discounts or commissions were
paid. With respect to these sales of securities, the Company relied on the
provisions of Rule 504 of Regulation D promulgated under the Act. Aggregate
sales were less than $1,000,000.
On April 17, 1996, the Company issued a total of 5,600,000 shares of
Common Stock as consideration for various licenses to four parties. See Part I,
Item 1. Description of Business. With respect to the issuance of these shares,
the Company relied on the provisions of Section 4(2) of the Securities Act of
1933, as amended, in that such transactions did not involve any public offering.
On August 28, 1996, a total of 607,143 shares of Common Stock were sold
for an aggregate of $170,000 in cash. No underwriting discounts or commissions
were paid. With respect to these sales of securities, the Company relied on the
provisions of Rule 504 of Regulation D promulgated under the Act. Aggregate
sales were less than $1,000,000.
12
<PAGE>
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of the General Corporation Law of Nevada and Article X
of the Company's Articles of Incorporation permit the Company to indemnify its
officers and directors and certain other persons against expenses in defense of
a suit to which they are parties by reason of such office, so long as the
persons conducted themselves in good faith and the persons reasonably believed
that their conduct was in the corporation's best interests or not opposed to the
corporation's best interests, and with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Indemnification is not permitted in connection with a proceeding by or in the
right of the corporation in which the officer or director was adjudged liable to
the corporation or in connection with any other proceeding charging that the
officer or director derived an improper personal benefit, whether or not
involving action in an official capacity.
13
<PAGE>
[LETTERHEAD OF STALEY, OKADA, CHANDLER & SCOTT]
AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Shareholders of Interactive Processing, Inc.:
We have audited the balance sheet of Interactive Processing, Inc. (a Development
Stage Company) as at 30 April 1996 and the statements of loss and deficit and
cash flow for the period then ended. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform an audit to obtain reasonable
assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at 30 April 1996 and the
results of its operations and the changes in its financial position for the
period then ended in accordance with accounting principles generally accepted in
the United States.
/S/STALEY, OKADA, CHANDLER & SCOTT
Burnaby, B.C. STALEY, OKADA, CHANDLER & SCOTT
28 August 1996 CHARTERED ACCOUNTANTS
- --------------------------------------------------------------------------------
COMMENTS BY AUDITORS FOR U.S. READERS ON
CANADA-U.S. REPORTING CONFLICT
- --------------------------------------------------------------------------------
To the Directors of Interactive Processing, Inc.:
In the United States, reporting standards for auditors require the expression of
a qualified opinion when financial statements are affected by significant
uncertainties such as those referred to in Note 1 to these financial statements.
The above opinion on our report to the shareholders dated 28 August 1996 for the
period ended 30 April 1996 is not qualified with respect to, and provides no
reference to these uncertainties since such an opinion would not be in
accordance with Canadian reporting standards for auditors when the uncertainties
are adequately disclosed in the financial statements.
/S/STALEY, OKADA, CHANDLER & SCOTT
Burnaby, B.C. STALEY, OKADA, CHANDLER & SCOTT
28 August 1996 CHARTERED ACCOUNTANTS
- --------------------------------------------------------------------------------
<PAGE>
Interactive Processing, Inc. STATEMENT 1
(A Development Stage Company)
Balance Sheet
U.S. Funds
<TABLE>
<CAPTION>
31 October 30 April
ASSETS 1996 1996
(Unaudited -
Prepared by Management)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current Cash $ $7,824 38,889
Accounts receivable 1,452 -
Work in progress 32,169 -
Inventory 38,973 1,080
Prepaid expenses - 6,216
-------------------------------
80,418 46,185
Capital Assets, net of amortization 4,760 -
License Costs (Note 4) 5,600 5,600
Prepaid Royalty Costs, net of
amortization of $3,261 (Note 9b) 21,739 -
---------------------------------------------------------------------------
$ 112,517 $ 51,785
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Accounts payable $ 48,046 $ 26,522
---------------------------------------------------------------------------
Due to a Related Party (Note 5) 12,580 12,580
---------------------------------------------------------------------------
Obligation to Issue Share Capital
(Note 6) 57,350 -
---------------------------------------------------------------------------
Continued Operations (Note 1)
<CAPTION>
SHAREHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Share Capital (Notes 7 and 9a) 356,300 186,300
Deficit - Statement 2 (361,759) (173,617)
-------------------------------
</TABLE>
- See Accompanying Notes -
<PAGE>
Interactive Processing, Inc. STATEMENT 2
(A Development Stage Company)
Statement of Loss and Deficit
U.S. Funds
<TABLE>
<CAPTION>
Six Months Period
Cumulative Ended Ended
from 31 October 30 April
Inception 1996 1996
(Unaudited - (Unaudited -
Prepared by Prepared by
Management) Management)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue Sales $ 7,504 $ 7,504 $ -
Cost of Goods Sold 8,962 8,962 -
---------------------------------------------------------------------------
Gross Profit (Loss) (1,458) (1,458) -
---------------------------------------------------------------------------
Expenses Marketing and product development 151,310 46,598 104,712
Consulting fees 72,608 45,957 26,651
Legal 28,472 18,972 9,500
Travel and promotion 16,803 7,904 8,899
Investor relations 31,175 24,569 6,606
Accounting and audit 11,498 5,848 5,650
Office 24,347 18,717 5,630
Filing fees 6,980 2,825 4,155
Amortization 4,101 4,101 -
Rent 6,895 6,895 -
Salaries 3,046 3,046 -
Director fees 1,000 - 1,000
Transfer agent 1,505 905 600
Bank charges and interest 561 347 214
-------------------------------------
360,301 186,684 173,617
---------------------------------------------------------------------------
Loss for the Period (361,759) (188,142) (173,617)
Retained earnings (deficit)
- Beginning of period - (173,617) -
---------------------------------------------------------------------------
Deficit - End of Period $(361,759) $(361,759) $ (173,617)
- -------------------------------------------------------------------------------------------------------------------
Loss per Share - Basic $ (0.05) $ (0.02) $ (0.07)
- -------------------------------------------------------------------------------------------------------------------
Weighted Average Number of
Common Shares Outstanding 7,397,213 9,631,500 2,666,000
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
- See Accompanying Notes -
<PAGE>
Interactive Processing, Inc. STATEMENT 3
(A Development Stage Company)
Statement of Cash Flow
U.S. Funds
<TABLE>
<CAPTION>
Six Months Period
Cumulative Ended Ended
from 31 October 30 April
Cash Resources Provided By (Used In) Inception 1996 1996
(Unaudited - (Unaudited -
Prepared by Prepared by
Management) Management)
- -------------------------------------------------------------------------------------------------------------------
<S>
<C> <C> <C>
Operating Activities Loss for the year $ (361,759) $ (188,142) $ (173,617)
Amortization 4,101 4,101 -
-------------------------------------
(357,658) (184,041) (173,617)
---------------------------------------------------------------------------
Changes in non-cash working capital
Inventory (38,973) (37,893) (1,080)
Accounts receivable (1,452) (1,452) -
Prepaid expenses - 6,216 (6,216)
Accounts payable 48,046 21,524 26,522
Work in progress (32,169) (32,169) -
-------------------------------------
(24,548) (43,774) 19,226
---------------------------------------------------------------------------
(382,206) (227,815) (154,391)
---------------------------------------------------------------------------
Financing Activities Share capital issued 395,700 170,000 225,700
Obligations to issue share capital 57,350 57,350 -
Due from related party 12,580 - 12,580
Share issuance costs (45,000) - (45,000)
-------------------------------------
420,630 227,350 193,280
---------------------------------------------------------------------------
Investing Activities Capital assets purchased (5,600) (5,600) -
License rights (25,000) (25,000) -
-------------------------------------
(30,600) (30,600) -
---------------------------------------------------------------------------
Net Increase (Decrease) in Cash 7,824 (31,065) 38,889
Cash position - Beginning of period - 38,889 -
---------------------------------------------------------------------------
Cash Position - End of Period $ 7,824 $ 7,824 $ 38,889
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Supplementary Schedule of Non-Cash Transaction SCHEDULE
For the Periods Ended 31 October and 30 April 1996
U.S. Funds
- --------------------------------------------------------------------------------
The following non-cash transaction occurred during the period ended 30 April
1996:
- Issued 5,600,000 common shares at $0.01 per share to purchase electronic
product licenses (Note 4).
No non-cash transactions occurred during the period ended 31 October 1996
(Unaudited - Prepared by Management).
- --------------------------------------------------------------------------------
- See Accompanying Notes -
<PAGE>
Interactive Processing, Inc.
(A Development Stage Company)
Notes to Financial Statements
31 October 1996 (Unaudited - Prepared by Management)
and 30 April 1996
U.S. Funds
- --------------------------------------------------------------------------------
1. Continued Operations These financial statements are prepared
on a going concern basis which assumes
that the company will be able to
realize assets and discharge
liabilities in the normal course of
business. As at 30 April 1996 the
company had a deficit of $173,617 (31
October 1996 - $361,759 - Unaudited -
Prepared by Management). The company is
not yet generating significant sales
revenue and does not have sufficient
cash flow to finance obligations for
marketing rights, administrative and
overhead expenses.
These factors raise substantial doubt
about the company's ability to continue
as a going concern. These financial
statements do not include any
adjustments that might result from the
outcome of these uncertainties. The
ability to continue as a going concern
is dependent on its ability to:
a) Generate profitable operations in
the future.
b) Obtain additional financing.
Management plans to raise funds through
issuance of treasury shares to finance
ongoing operations and commitments
until sufficient cash flow from
operations is generated.
- --------------------------------------------------------------------------------
2. Nature of Operations The company was incorporated on 15
September 1995 under the laws of the
State of Nevada. The business purpose
of the company is to engage in the
marketing and sale of high tech
consumer electronics.
The company began active operations in
December 1995 by issuing seed stock for
cash and investigating the potential
market for a consumer electronic
product.
On 17 April 1996, the company purchased
the manufacturing and marketing rights
to an electronic product (Note 4).
On 16 July 1996, the company purchased
the licensing rights to promote a
second product (Note 9b).
These financial statements present the
results of the company's operations in
the 229 day period since inception to
30 April 1996 and the six month period
ended 31 October 1996 (Unaudited -
Prepared by Management).
- --------------------------------------------------------------------------------
3. Significant Accounting
Policies a) Inventory
Inventory is valued at lower of cost
and net realizable value.
b) License Costs
License costs are deferred and
amortized over three years beginning
with commercial production.
c) Prepaid Royalty Costs
Prepaid royalty costs are deferred
and amortized at the greater of:
i) straight line over the 23 month
term of the contract, or
ii) the royalty rate under the terms
of the contract.
- --------------------------------------------------------------------------------
<PAGE>
Interactive Processing, Inc.
(A Development Stage Company)
Notes to Financial Statements
31 October 1996 (Unaudited - Prepared by Management)
and 30 April 1996
U.S. Funds
- --------------------------------------------------------------------------------
3. Significant Accounting
Policies - Continued d) Work in Progress
Work in progress is carried at the
lower of cost and estimated net
realizable value, and to 31 October
1996 is represented by cash advances
made to a manufacturer of the
product.
e) Interim Financial Statements
The financial statements as of 31
October 1996 and for the six months
ended 31 October 1996 are unaudited.
In the opinion of management the
interim financial statements include
all adjustments which management
considers necessary for a fair
presentation of the financial
condition and the operating results
and cash flows for those periods. In
addition, all such adjustments are
of a normal, recurring nature.
Interim periods may not be
indicative of results for the entire
year.
- --------------------------------------------------------------------------------
4. License Agreements Under the terms of four agreements
dated 17 April 1996, the company
purchased the non-exclusive rights to
develop, manufacture, market,
distribute and sell a patented product
known as the "TV Terminator" in most
countries around the world.
The company agreed to pay consideration
to the licensors as follows:
a) 5,600,000 common shares (issued).
b) Royalties of $1.50 for each unit
sold by the company or any sub-
licensee of the company due on a
quarterly basis.
- --------------------------------------------------------------------------------
5. Due to Related Party Amounts due to a company controlled by
a director are non-interest bearing,
unsecured, and have no specific terms
of repayment.
- --------------------------------------------------------------------------------
6. Obligation to Issue Share
Capital The company has received funds for
which management intends to issue
treasury shares under a private
placement. To date the obligation is
unsecured and non-interest bearing. No
agreement has been reached with the
prospective shareholders for the share
issuance.
- --------------------------------------------------------------------------------
<PAGE>
Interactive Processing, Inc.
(A Development Stage Company)
Notes to Financial Statements
31 October 1996 (Unaudited - Prepared by Management)
and 30 April 1996
U.S. Funds
- --------------------------------------------------------------------------------
7. Share Capital a) Details are as follows:
<TABLE>
<CAPTION>
31 October 1996 30 April 1996
(Unaudited - Prepared
by Management)
--------------------- --------------------
Number Amount Number Amount
----------------------------------------------------------------------------
Authorized:
i) As at 30 April 1996
25,000,000 common shares with a par value of $0.001
ii) As at 31 October 1996 (Unaudited - Prepared by Management)
20,000,000 common shares with a par value of $0.001
5,000,000 cumulative, convertible, preferred shares with a par value
of $0.001
Issued and fully paid:
Common shares
<S> <C> <C> <C> <C>
Opening balance 9,419,000 $ 186,300 - $ -
- private placements 607,143 170,000 3,819,000 225,700
- for license costs - - 5,600,000 5,600
- share issuance costs - - - (45,000)
-------------------------------------------------------------------------------
10,026,143 $ 356,300 9,419,000 $ 186,300
-------------------------------------------------------------------------------
</TABLE>
b) Of the total issued and outstanding
common shares of the company,
5,600,000 are restricted from
trading until 17 April 1998.
c) Stock options issued to directors in
the 31 October 1996 period are as
follows:
<TABLE>
<CAPTION>
Number Price Expiry Date
-----------------------------------------------------------------------
<S> <C> <C>
500,000 $ 0.656 16 August 2006
</TABLE>
d) On 29 April 1996, the company began
trading its shares on the National
Association of Security Dealers
("NASD") over-the-counter market.
e) Subsequent to the period ended 30
April 1996, the authorized share
capital was amended to 20,000,000
common shares and 5,000,000
cumulative, convertible, preferred
shares. The preferred shares are
redeemable after 31 December 1997 at
$0.50 per share and carry a 10%
dividend rate. No preferred shares
are issued at 31 October 1996
(Unaudited - Prepared by
Management).
- --------------------------------------------------------------------------------
8. Related Party Transactions The following related party transactions
are at fair market value as estimated by
management:
a) During the period ended 30 April
1996:
i) Inventory
The company purchased 60 units
of a consumer electronics
product at cost from a company
controlled by a director for
$18 per unit.
ii) Accounts Payable
Included in accounts payable is
$7,933 owing to a company
controlled by a director.
<PAGE>
Interactive Processing, Inc.
(A Development Stage Company)
Notes to Financial Statements
31 October 1996 (Unaudited - Prepared by Management)
and 30 April 1996
U.S. Funds
- --------------------------------------------------------------------------------
8. Related Party Transactions
- Continued a) - Continued
iii) Marketing and Product
Development
Included in marketing expense
are fees of $57,095 paid to a
company controlled by a
director.
iv) Consulting Fees Expense
Included in consulting fees
expense is $10,301 paid to a
company controlled by a
director. An additional $8,000
of consulting fees were paid to
a company controlled by a
second director.
v) Office Expense
Included in office expense is
$3,500 in rent paid to a
company controlled by a
director.
b) During the period ended 31 October
1996 (Unaudited - Prepared by
Management):
i) Consulting Fees Expense
Included in consulting fees
expense is $22,500 paid to a
company controlled by a
director. An additional $10,858
of consulting fees were paid to
a company controlled by a
second director.
ii) Office Expense
Included in office expense is
$700 in rent paid to a company
controlled by a director.
- --------------------------------------------------------------------------------
9. Subsequent Events a) Share Capital Issued
On 28 August 1996, the company
agreed to issue 607,143 treasury
shares for cash consideration of
$0.28 per share for a total of
$170,000.
<PAGE>
Interactive Processing, Inc.
(A Development Stage Company)
Notes to Financial Statements
31 October 1996 (Unaudited - Prepared by Management)
and 30 April 1996
U.S. Funds
- --------------------------------------------------------------------------------
9. Subsequent Events - Continued b) License Agreement
Under the terms of an agreement
dated 16 July 1996, the company
purchased the exclusive licensing
rights in the United States and
Canada for the use of the trademarks
of the "Married ... with Children"
television series to promote the
company's "The Bundy Sport Remote"
product.
The licensing rights expire on 30
June 1998 but can be terminated by
the licensor under certain
conditions.
The company will pay a royalty of
10% to 12% of net sales depending
upon the terms of the product sale.
The company has guaranteed a minimum
of $75,000 in total royalties during
this term. The first $25,000 of the
total guaranteed minimum was due as
an advance upon signing the
agreement (paid).
Until 12 July 1997, the company has
an option to extend the agreement to
exclusively worldwide by paying an
additional $25,000. In addition, if
the company has paid the guaranteed
minimum royalty and met certain
sales targets, it can extend the
term of the agreement to 30 June
2000 by providing written notice by
1 May 1998.
c) Stock Options Issued
On 16 August 1996, the company
granted incentive stock options to
Sheldon Silverman (300,000 shares)
and Keith Balderson (200,000 shares)
exercisable at $0.656 per share
until 16 August 2006. Both are
directors of the company.
- --------------------------------------------------------------------------------
<PAGE>
PART III
<TABLE>
ITEM 1. INDEX TO EXHIBITS.
<CAPTION>
REGULATION SEQUENTIAL
S-B NUMBER EXHIBIT PAGE NUMBER
<S> <C> <C>
3.1 Articles of Incorporation (1)<F1> N/A
3.2 Bylaws (1)<F1> N/A
10.1 Patent and Trademark License Agreement between Amoeba N/A
Corporation and Interactive Processing, Inc. dated April 17, 1996
(1)<F1>
10.2 Patent and Trademark Sublicense Agreement between But Sup N/A
But International, Inc. and Interactive Processing, Inc. dated April
17, 1996 (1)<F1>
10.3 Patent and Trademark Sublicense Agreement between Aurora N/A
Marketing Inc. and Interactive Processing, Inc. dated April 17,
1996 (1)<F1>
10.4 Patent and Trademark Sublicense Agreement between Measca N/A
Corporation and Interactive Processing, Inc. dated April 17, 1996
(1)<F1>
10.5 1996 Stock Option Plan (1)<F1> N/A
10.6 1996 Restricted Stock Plan (1)<F1> N/A
10.7 Merchandising License Agreement between ELP Communications N/A
and Interactive Processing, Inc. dated April 17, 1996 (1)<F1>
10.8 Joint Venture Agreement with CPNM (2)<F2> N/A
10.9 Consulting Agreement with Golden Treasures (2)<F2> N/A
10.10 Consulting Agreement with S.A. Alden (2)<F2> N/A
10.11 Fulfillment Contract with Golden Gems Nevada, Ltd. (2)<F2> N/A
27 Financial Data Schedule 25
<FN>
<F1>
(1) Incorporated by reference from the Exhibits filed with the Company's Form 10-SB, filed with
the Securities and Exchange Commission on November 25, 1996, Commission file number 0-
21791.
<F2>
(2) Incorporated by reference from the Exhibits filed with the Company's
Form 10-SB Amendment No. 1, filed with the Securities and Exchange
Commission on March 10, 1997, Commission file number 0-21791.
</FN>
</TABLE>
ITEM 2. DESCRIPTION OF EXHIBITS.
23
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
INTERACTIVE PROCESSING, INC.
Date: March 13, 1997 By:/s/Sheldon Silverman
Sheldon Silverman, President
24
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET, STATEMENT OF LOSS AND DEFICIT, STATEMENT OF CASH FLOW, AND THE NOTES
THERETO, FOUND ON PAGES 14 THROUGH 22 OF THE COMPANY'S FORM 10-SB/A AMENDMENT
NO. 2, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<EXCHANGE-RATE> 1
<CASH> 7,824
<SECURITIES> 0
<RECEIVABLES> 1,452
<ALLOWANCES> 0
<INVENTORY> 71,142
<CURRENT-ASSETS> 80,418
<PP&E> 5,600
<DEPRECIATION> 840
<TOTAL-ASSETS> 112,517
<CURRENT-LIABILITIES> 48,046
<BONDS> 0
0
0
<COMMON> 356,300
<OTHER-SE> (361,759)
<TOTAL-LIABILITY-AND-EQUITY> 112,517
<SALES> 7,504
<TOTAL-REVENUES> 7,504
<CGS> 8,962
<TOTAL-COSTS> 8,962
<OTHER-EXPENSES> 186,684
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (188,142)
<INCOME-TAX> 0
<INCOME-CONTINUING> (188,142)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (188,142)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
