<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
TREASURY INTERNATIONAL, INC.
(Name of Small Business Issuer in its Charter)
Delaware 98-0160284
- ----------------------- -------------------------
State of Incorporation I.R.S. Employer I.D. No.
1181 Finch Avenue West, Unit 21
North York, Ontario, Canada M3J 2V8
- ------------------------------- -------------------------
Address of Principal (Zip Code)
executive offices)
Issuer's telephone number: (416) 663-4194
---------------
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
------------------------- -----------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock
- --------------------------------------------------------------------------------
(Title of Class)
Page 1 of 80
Exhibit Index is on
Page 35
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
A. BUSINESS DEVELOPMENT.
Treasury International, Inc. was incorporated in the State of
Delaware on August 18, 1995, at which time it acquired all of the issued and
outstanding shares of J.J.A.M.P Treasury International Corp. ("JJAMP"), a
Canadian company which has been operating as "Treasury International" since its
incorporation on September 29, 1993. This acquisition was accomplished through
the issuance of 8,023,812 shares of the Company's common stock, pro rata, to the
holders of all of the issued and outstanding shares of JJAMP's stock. The
Company conducts business directly and through its JJAMP subsidiary, and unless
the context indicates otherwise, JJAMP and Treasury International are referred
to collectively herein as the "Company".
B. BUSINESS OF ISSUER.
Brief Description of the Company's Business. The Company is in the
-------------------------------------------
business of marketing and distributing non-pharmaceutical products in South
America and other emerging markets. It has developed and implemented a strategy
to source, purchase, market and distribute in South America non-pharmaceutical
branded and private label merchandise which enables distributors and their
retailers to obtain product quickly and at competitive prices.
The success of the Company's business is largely dependent upon the
active participation of James Hal (a/k/a James Halioua), its Chairman and Chief
Executive Officer, who devotes a substantial, but not all, of his business time
to the Company's affairs. The Company has no employment agreement with Mr. Hal
nor any "key man" insurance on Mr. Hal's life, and in the event his services are
lost for any reason whatsoever the Company's business likely would suffer
materially. There can be no assurance that the Company would be able to employ
qualified person(s) on acceptable terms to replace Mr. Hal.
The Company's ability to realize sufficient cash flow to cover its
overhead for the next 12 months is dependent primarily upon the extent to which
the products for which it has obtained the exclusive South American rights are
accepted as less expensive substitutes for better known brands by consumers. No
assurance can be given as to such acceptance. Accordingly, the Company may be
unable to generate sufficient revenues or attain the profitability necessary to
remain in business.
The Company requires substantial additional funds to finance its
business activities on an ongoing basis and its
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proposed expansion thereof. Therefore, the Company intends to seek additional
financing, to be allocated principally to advertising, promotion and working
capital applications. The Company has not yet formulated its plan to obtain, and
it has received no commitment for, such additional financing. Any such
additional funding likely will result in a material and substantial dilution to
the Company's then existing shareholders. If adequate funds are not available,
the Company may be required to delay, reduce or eliminate marketing and other
operating expenses and otherwise limit its operations to those that can be
financed from cash on hand. The Company may be compelled to obtain funds by
pledging or relinquishing material rights to its assets that it otherwise would
not give up. No assurance can be given that any necessary additional financing
can be obtained when needed on terms which are affordable by the Company, if at
all.
Principal Products. The Company has obtained exclusive or
------------------
non-exclusive South American distribution rights for approximately 225
non-pharmaceutical and consumer products within the following categories:
cosmetics, hair care products, band-aids, condoms, razors, cleaning products and
batteries. Examples of products to which the Company has obtained exclusive
South American distribution rights include the following:
(a) Naturelli Shampoo and Conditioner;
(b) Manicare Cosmetic & Personal Hygiene Accessories;
(c) Ideal Band Aids;
(d) Kama Sutra Premium Latex Condoms;
(e) Bond Disposable Razors;
(f) Spot Shot Rug Shampoo;
(g) Smart Knife; and
(h) Tadiran Tadicell Alkaline Battery Products.
Distribution Methods. The Company typically sources its products
--------------------
from either the manufacturer or the manufacturer's distributors. The Company
arranges for their delivery to the Company's distributors and independent sales
agents, who sell the Company's products in local markets to retailers and
others.
The Company has informal arrangements with fourteen (14) independent
sales representatives. Eight (8) of such independent sales representatives
provide direct distribution throughout South America and six (6) independent
sales representatives service Kuwait, Israel, France, Spain, Morocco
and England.
Although the Company has embarked on the development of similar
distribution arrangements in markets in Africa and other emerging markets, no
assurance can be given that such expansion efforts will be successful.
Dependence on Principal Suppliers. The Company is heavily dependent
---------------------------------
on a small number of suppliers, including the
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following manufacturers and distributors, with whom the Company has entered into
distribution agreements covering Latin America:
(a) National Home Products, Ltd.;
(b) Manicare Divisional AAI;
(c) Bernco Inc.;
(d) Tadiron Electronics Industries, Inc.; and
(e) Smart Tools Limited.
Dependence on Two Distributors and Two Customers. The Company sells
------------------------------------------------
directly to two (2) major retail chain distributors who together distribute
various products to approximately 1,300 retail stores and accounted, in the
aggregate, for about 70% of the Company's sales in fiscal 1995 and 86% in fiscal
year 1994. The balance of the Company's sales is derived from approximately
thirty (30) smaller account distributors. The Company also is dependent on two
customers, each of which accounts for more than 10%, and in the aggregate
accounted for approximately 75%, of the Company's sales in 1995. The loss of
either of such distributors or customers would be extremely detrimental, and
could be fatal, to the Company's business.
Competition. There is virtually no barrier to entry into the
-----------
Company's business and, accordingly, the Company must survive intense
competition in terms of the marketing, pricing and selling of similar products
produced by different manufacturers. The Company must compete in terms of
advertising and promotion, name recognition, reliability, price, packaging and
consumer appeal. Virtually all of the Company's actual and potential competitors
have greater marketing, financial and personnel resources than the Company and
many are well established companies with international reputations for success
in the marketing of consumer products. Certain of these competitors, such as
Proctor & Gamble, dominate the consumer product market in the United States and
could, if they chose, dominate the Company's targeted markets of South America
and other developing regions.
Government Approvals and Licenses. Although the Company believes it
---------------------------------
and its suppliers, distributors and independent salesman have all necessary
governmental approvals, licenses, permits and certificates, the uncertain
political, economic and social climates in many of the countries in which the
Company markets its products could lead to the imposition of much stricter
requirements regarding the importation and selling of the Company's products.
Should one or more of the countries in which the Company markets its products
impose significantly greater tariffs, import taxes or other restrictions,
limitations or conditions, of either a monetary or non-monetary nature, on the
importation of the Company's products, there would be a material adverse impact
upon the Company's operations and financial results and could cause such a
deterioration of the Company's business that it would no longer be viable.
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Currency, Foreign Exchange and Banking. The Company requires that
--------------------------------------
all payments to it for its products be made in United States Dollars through
world prime banks. The Company believes, although no assurance can be given,
that it has further reduced the risks inherent in international trade by
contracting with the Export Development Corporation ("EDC"), a Canadian Crown
Corporation of the Government of Canada, which provides insurance, guarantees
and export financing to the Company, thereby facilitating the sale of the
Company's goods and services abroad.
Although there are presently no currency exchange controls in South
America, Africa and other emerging markets in which the Company does, or
contemplates that it may conduct, business, no assurance can be given that such
controls will not be imposed in the future.
Research and Development Costs. During its last two fiscal years,
------------------------------
the Company has made no expenditures on account of research and development.
Employees. The Company has five (5) full-time employees. The
---------
Company's employees have educational, financial and/or family roots in many of
the countries being served or developed. Those employees are able to communicate
fluently in one or more of the following languages: English, Spanish, French,
Portuguese, Italian, Arabic and Hebrew.
The Company has informal arrangements with fourteen (14) independent
sales representatives. Eight (8) of such independent sales representatives
provide direct distribution throughout South America and six (6) independent
sales representatives service Kuwait, Israel, France, Spain, Morocco
and England.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
(a) GENERAL:
--------
UNCERTAINTY OF FUTURE FINANCIAL RESULTS: The Company's ability to
realize sufficient cash flow to cover its overhead for the next 12 months is
dependent primarily upon the extent to which the products for which it has
obtained the exclusive South American rights are accepted as less expensive
substitutes for better known brands by consumers. No assurance can be given as
to such acceptance. Accordingly, the Company may be unable to generate
sufficient revenues or attain the profitability necessary to remain in business.
NEED FOR SUBSTANTIAL ADDITIONAL FUNDS: The Company requires
substantial additional funds to finance its business
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activities on an ongoing basis and its proposed expansion thereof. Therefore,
the Company intends to seek additional financing, to be allocated principally to
advertising, promotion and working capital applications. The Company has not yet
formulated its plan to obtain, and it has received no commitment for, such
additional financing. Any such additional funding likely will result in a
material and substantial dilution to the Company's then existing shareholders.
If adequate funds are not available, the Company may be required to delay,
reduce or eliminate marketing and other operating expenses and otherwise limit
its operations to those that can be financed from cash on hand. The Company may
be required to obtain funds by pledging or relinquishing material rights to its
assets that it otherwise would not give up. No assurance can be given that any
necessary additional financing can be obtained when needed on terms which are
affordable by the Company, if at all.
(b) FULL FISCAL YEARS:
-----------------
RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED
JANUARY 31, 1996.
During fiscal 1995 the Company's sales increased by 66% to
$1,110,736 from $669,718 in fiscal year 1994, and net income increased by 40% to
$41,665 from $29,735 in fiscal year 1994. The increased sales were attributable
to greater distribution throughout South America and Central America. The
Company sells directly to two (2) major retail chain distributors who together
distribute various products to approximately 1,300 retail stores and accounted,
in the aggregate, for about 70% of the Company's sales in fiscal 1995 and 86% in
fiscal year 1994. The balance of the Company's sales is derived from
approximately thirty (30) smaller account distributors. Although the Company has
only recently achieved profitability, it is expected, although no assurances can
be given, that it will experience continued growth in its fiscal year ending
January 31, 1997 and that it will be able to both increase its share of current
markets and expand into new markets in Latin American and other emerging
markets. The cost to the Company of the products sold has been consistent over
the last two fiscal years at 60.1% of sales during fiscal year 1995, down from
60.8% of sales in 1994. The Company's attention to buying is reflected in its
gross profit, which improved marginally in 1995 to 39.9% of sales as compared to
39.2% of sales in 1994. The Company's operating, general and administrative
expenses increased slightly in 1995 to $392,594 or 35.4% of sales, as compared
to $230,051 or 34.51% of sales in fiscal 1994.
Current assets totalled $1,168,590 in fiscal 1995 as compared to
$164,704 in fiscal 1994. At year-end 1995, cash and short-term deposits were
$292,611 and accounts receivable totalled $180,304; 70% of such 1995 and 1994
receivables was due from the Company's two major distributors, and the balance
was due from the Company's other distributors. During each of the last two
years,
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the Company has granted its distributors payment terms ranging from 60 days to
90 days. The Company has no bad debts.
Deferred costs in the amount of $565,013, which will be amortized
over a period of four (4) years, consist of expenditures incurred for the
development, expansion and progress of the Company and more particularly for the
services to be rendered in sourcing, reviewing, inspecting and negotiating
potential acquisitions. Accounts payable have been reduced to $49,317 from
$101,565 in fiscal 1994. No loans or advances were made by shareholders to the
Company in fiscal 1995 and all outstanding debts owed to shareholders, on
account of loans/advances made in fiscal year 1994 were converted to equity
interests in the Company.
RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED
JANUARY 31, 1995.
On August 18, 1995, the Company acquired, effective August 1, 1995,
all of the outstanding capital stock of J.J.A.M.P. Treasury International Corp.
("JJAMP"). From September 1993 to September 1994, the directors and officers of
JJAMP (the Company's predecessor) developed product sourcing, purchasing,
marketing and distribution strategies for the exclusive distribution of products
in South American markets. JJAMP successfully negotiated a license to distribute
its first branded product line and commenced operations with its first sales in
October, 1994. The first four months of operations ended January 31, 1995, which
date was chosen to be JJAMP's fiscal year end. The results of JJAMP's operations
for fiscal year ended January 1995 ("fiscal 1994") will be compared herein to
the first four months of its operations, ended January 31, 1994 ("fiscal 1993").
During its fiscal year ended on January 31, 1995, JJAMP's sales
increased to $669,718 from $144,724 ($434,172 annualized) for the four months in
fiscal year 1994. This increase was directly attributable to JJAMP's sourcing of
additional product lines and increasing its main manufacturing sources from one
to eight, representing approximately 225 products. Cost of sales as a percentage
thereof was slightly lower in fiscal 1994 at 61% of sales compared to 62% of
sales during the four months from inception to January 31, 1994. Gross profit as
a percentage of sales slightly increased to 39% from 38.1% during the prior
period. Operating, general and administrative expenses for fiscal 1994 were
$230,051 as compared to $92,028 ($368,112 annualized) for the four months ended
January 31, 1994. The higher costs during the prior period were directly
attributable to start-up costs. Net income for fiscal 1994 was $29,735, compared
to a loss of $37,907 ($113,721 annualized) for the four months ended January 31,
1995. JJAMP recorded a deficit of $8,172 for fiscal 1994, as compared to a
deficit of $37,907 ($113,721 annualized) for the four months ended January 31,
1995.
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Current assets totalled $164,704 as at the end of fiscal 1994,
compared to $70,084 as at January 31, 1994. Accounts receivable for fiscal 1994
totalled $68,349, of which 85%, or about $58,100, was due from the Company's two
major distributors and the balance (15%, or $10,250) was due from about 25 other
distributors. This compared to total receivables of $29,050 ($87,150 annualized)
for the four months ended January 31, 1994 with roughly the same percentile
ratio between the two largest distributors and other distributors. Payment terms
established by JJAMP ranged from 60 to 90 days for both periods and JJAMP had no
bad debts in either period. Accounts payable for fiscal 1994 were $101,565,
compared to $47,201 ($141,603 annualized) for the four months ended on January
31, 1994. In each period, accounts payable were incurred primarily for the
purchase of inventory.
ITEM 3. DESCRIPTION OF PROPERTY.
(a) OPERATING LOCATIONS: The Company has no ownership interest in any real
property. It presently leases from a third party 2,500 square feet of office and
warehouse space at 1181 Finch Avenue West, Unit 21, North York, Ontario, Canada,
pursuant to an oral lease with a term ending October 31, 1997, providing for
monthly rent of $CDN1,583.06. The Company does not anticipate changing its
present leasing situation or purchasing any real property in the near future.
(b) INVESTMENT POLICIES: The Company has no limitations
on the amounts which it may invest in any one investment or type
of investment. This policy may be changed without a vote of the
shareholders.
The Company has no investment in real estate, real estate mortgages,
real estate secured securities or publicly traded securities nor does it have
any investment in persons or companies primarily devoted to such investments,
and it is not the policy of the Company to make investments for the purpose of
capital gain or passive income. Presently, all available monies are being used
for day to day operations, marketing and promotion of its products.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
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The following table sets forth certain information regarding the
ownership of the Company's Common Stock (being the Company's only voting
securities) which are deemed under the current rules of the Securities and
Exchange Commission to be beneficially owned by any person (including any
"group" as that term is used in Instruction No. 7 to S-B Item 403) known by the
Company to be the beneficial owner of more than 5% of the Common Stock of the
Company as of April 30, 1996. Except as otherwise indicated, the Company has
been advised that all individuals listed below have the sole power to vote and
dispose of the number of shares set forth opposite their names.
BENEFICIAL
OWNERSHIP OF
NAME AND ADDRESS COMMON STOCK PERCENT OF CLASS
- ---------------- ------------ ----------------
James Hal 12,000,012(1) 65%
56 Theodore Place
Thornhill, Ontario
Canada L4J 834
Cede & Co. 1,841,800 15%
Box # 20
Bowling Green Station
New York, N.Y. 10004
- ----------
(1) Includes currently exercisable options to purchase 4,000,000 shares of
Common Stock. If such options were exercised, Mr. Hal would own
beneficially 74% of the Common Stock outstanding.
(b) SECURITY OWNERSHIP OF MANAGEMENT:
The following table sets forth certain information regarding the
ownership of the Company's Common Stock (being the Company's only voting
securities) which are deemed under the current rules of the Securities and
Exchange Commission to be beneficially owned by the Company's executive officers
and directors, individually, and all executive officers and directors as a
group, as of April 30, 1996. Except as otherwise indicated, the Company has been
advised that all individuals listed below have the sole power to vote and
dispose of the number of shares set forth opposite their names.
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<PAGE>
<TABLE>
<CAPTION>
% of Class if
Number of Options
Name, Title and Address Shares % of Class Options Granted Exercised
- ----------------------- --------- ---------- ------------------ -----------
(d)
---
<S> <C> <C> <C> <C>
James Hal 8,000,012 65% 4,000,000 74%
(President & Director)
56 Theodore Place
Thornhill, Ontario
Canada L4J 834
Howard Halpern 50,600(a) (e) 110,000 1%
(CFO, Executive Vice
President and Director)
160 Theodore Place
Thornhill, Ontario
Canada, L4J 8E3
Robert Abourmad 600(b) (e) 10,000 (e)
(Director)
87 Bayhampton Crescent
Thornhill, Ontario
Canada L4J 4Y2
Mark Halioua 20,700(c) (e) 10,000 (e)
(Director)
147 Beverly Glen Blvd.
Thornhill, Ontario
Canada L4J 4Y2
Nathalie Elfassy 0 0 10,000 (e)
(Treasurer)
7460 Bathurst Street
Unit # 607
Thornhill, Ontario
Canada M2R 3A2
Executive Officers 8,071,912 66% 4,140,000 75%
& Directors as a
Group (5 persons)
</TABLE>
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(a) Includes 50,000 shares owned by his wife and 300 shares owned
by his daughter.
(b) Includes 300 shares owned by his wife.
(c) Includes 300 shares owned by his wife.
(d) Represents options exercisable currently or within 60 days.
(e) Represents less than 1%.
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<PAGE>
(c) CHANGES IN CONTROL:
There are no arrangements known to the Company which may result in a
change in control of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS.
(a) OFFICERS AND DIRECTORS: The following table provides information
----------------------
concerning each executive officer and director of the Company. All directors
hold office until the next annual meeting of shareholders or until their
successors have been elected and qualified.
Age Title
--- -----
James Hal 33 Chairman of the
Board, Chief
Executive Officer
and President
Howard Halpern 36 Chief Financial
Officer, Executive
Vice President
Nathalie Elfassy 27 Treasurer
Mark Halioua 41 Director
Robert Abourmad 44 Director
JAMES HAL has been Chairman of the Board, Chief Executive
Officer and a Director of the Company since its inception in
October 1993. Mr. Hal was the President and Chief Financial Officer of
J.J.A.M.P. Treasury International Corp. from its inception in
September 1993 through its acquisition by the Company in August
1995. From 1983 to 1993, Mr. Hal was the President of Keloua
Imports Ltd. of Concord, Ontario, Canada, a company involved in
sourcing and importing various products. Mr. Hal is also known as
Mr. Halioua.
Other directorships: Gaming Lottery Corp. (1992 to
present) and Le Print Express, Inc. (1992 to present).
HOWARD HALPERN has been Chief Financial Officer and Executive Vice
President of the Company since April 15, 1996. From 1989 until July, 1992 he was
the controller of Merisel Canada, Inc., a company involved in the wholesale sale
of personal computers and having approximate annual sales of $285,000,000 and
270 employees. Since July 1992, he has been in business as a Chartered
Accountant offering taxation, financial and management consulting services.
Other directorships: None.
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NATHALIE ELFASSY has been the Treasurer of the Company since August
18, 1995. From 1993 to 1994 she was the Manager of Information Systems for
Universal Exports of North York, Ontario, Canada. From 1988 to 1992, she was the
Program Manager, Computer Systems, of BMW Corporation of Toronto, Canada.
ROBERT ABOURMAD has been a Director of the Company since
August 18, 1995. From 1986 to 1990, he was the Plant Manager of
Pascal Hardware & Furniture Stores in Montreal, Quebec, Canada.
From 1990 to 1994, he was employed by Shalom Electric, Inc. of
Montreal, Quebec, Canada and from 1995 to present he has been the
President of Payless Locksmith, Inc. of Thornhill, Ontario, Canada.
Other directorships: None.
MARK HALIOUA has been a Director of the Company since August 18,
1995. Since August 1988, he has been the President of National Printing Groups
in Markham, Ontario, Canada.
Other directorships: None.
(b) Other Significant Employees: None
---------------------------
(c) Family relationships: Mark Halioua and James Hal are
--------------------
brothers.
(d) Involvement in Certain Legal Proceedings:
----------------------------------------
None.
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ITEM 6. EXECUTIVE COMPENSATION.
(a) SUMMARY COMPENSATION TABLE: The following information is provided for
--------------------------
the Company's Chief Executive Officer during the Company's last completed fiscal
year. The Company had no executive officers whose total annual salary and bonus
exceeded $100,000 for such year.
<TABLE>
<CAPTION>
================================================================================================================
ANNUAL
COMPENSATION LONG TERM COMPENSATION
================================================================================================================
Securities
Name Other Restricted Underlying
and Fiscal Annual Annual Annual Stock Options LTIP All Other
Position Year Salary Bonus Comp. Awards & SARs Payouts Compensation
- -------- ------ ------ ------ ------ ---------- ----------
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James 1995 $60,000 None None None 4,000,000 None None
- ----------------------------------------------------------------------------------------------------------------
Hal 1994 $50,000 None None None None None None
- ----------------------------------------------------------------------------------------------------------------
(CEO) 1993 $20,000 None None None None None None
================================================================================================================
</TABLE>
OPTIONS/SAR GRANT TABLE: The following information is provided for the Company's
- -----------------------
executive officers:
<TABLE>
<CAPTION>
=======================================================================================================
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
=======================================================================================================
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Name of Options/SARs Employees in or Base Expiration
Grantee Granted Fiscal Year Price Date
------- ------------ ------------ -------- ----------
=======================================================================================================
<S> <C> <C> <C> <C>
James Hal 4,000,000 80.32% $.05 8/17/05
- -------------------------------------------------------------------------------------------------------
Howard Halpern 110,000 2.21% $.05 8/17/05
- -------------------------------------------------------------------------------------------------------
Nathalie Elfassy 10,000 .20% $.05 8/17/05
=======================================================================================================
</TABLE>
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<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
ITEM 8. DESCRIPTION OF SECURITIES.
(a) GENERAL:
-------
The Company has authorized 30,000,000 shares of Common Stock, par
value $.0001 per share. There are issued and outstanding, as of April 30, 1996,
12,233,960 shares of Common Stock (104 holders of record).
The Company has adopted a stock option plan for which it has
reserved 10,000,000 shares of Common Stock. Options to purchase such reserved
shares may be granted by a committee of directors to key employees. Each option
may be exercised in whole or in part at any time within ten years of its grant
at an exercise price equal to the per share, fair market value of the Company's
Common Stock as at the time of the grant of the option. At April 30, 1996,
4,980,000 options have been granted at an exercise price of $.05 per share.
(b) VOTING RIGHTS:
-------------
Each share of Common Stock entitles the holder thereof to one vote,
either in person or by proxy, at a meeting of shareholders. The holders are not
permitted to vote their shares cumulatively. Accordingly, the holders of more
than 50% of the issued and outstanding shares of Common Stock can elect all of
the directors of the Company.
(c) DIVIDENDS:
---------
All shares of Common Stock are entitled to participate ratably in
dividends when and as declared by the Company's Board of Directors out of the
funds legally available therefor. Any such dividends may be paid in cash,
property or additional shares of Common Stock. The Company has not paid any
dividends since its inception and presently anticipates that no dividends will
be declared in the foreseeable future. Any future dividends will be subject to
the discretion of the Company's Board of Directors and will depend upon, among
other things, future earnings, the operating and financial condition of the
Company, its capital requirements, general business conditions and other
pertinent facts. Therefore, there can be no assurance that any dividends on the
Common Stock will be paid in the future.
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(d) MISCELLANEOUS RIGHTS AND PROVISIONS:
-----------------------------------
Holders of Common Stock have no preemptive or other subscription
rights, conversion rights, redemption or sinking fund provisions. In the event
of the dissolution, whether voluntary or involuntary, of the Company, each share
of Common Stock is entitled to share ratably in any assets available for
distribution to holders of the equity securities of the Company after
satisfaction of all liabilities.
(e) TRANSFER AGENT:
--------------
The Transfer Agent for the Company is Intercontinental Register &
Transfer Agency of Boulder City, Nevada.
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<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS.
(a) LIMITED PUBLIC MARKET: The Company's common stock is currently on the
---------------------
NASDAQ Bulletin Board. According to the National Quotation Bureau, Inc., for the
period from March 18, 1996, the time that the Company's stock was approved for
trading on the NASDAQ Bulletin Board through April 30, 1996, the high bid price
was $1.00 and the low bid price was $.30. These quotations reflect inter dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.
As of April 30, 1996 the Company had issued and outstanding,
12,223,690 shares of its common stock of which 4,199,878 are freely tradeable
and 8,023,812 are either restricted or control securities which must be sold in
accordance with Rule 144. The Company has granted options to purchase 4,980,000
shares of Common Stock, all of which are currently exercisable at a price of
$.05 per share.
(b) NUMBER OF SHAREHOLDERS: The number of beneficial holders of the common
----------------------
stock of the Company, as of April 1, 1996 was 104.
(c) DIVIDENDS: Since its inception, the Company has not declared any
---------
dividends on its common stock and does not anticipate paying any in the
foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
None.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Of the Company's 12,223,690 issued and outstanding shares of common
stock:
(i) In August 1995, the Company issued 8,023,812 shares,
pro rata, to the 34 shareholders of J.J.A.M.P.
Treasury International, Inc. ("JJAMP") in exchange for all of
the common stock of JJAMP.
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<PAGE>
(ii) In September 1995, the Company issued 2,750,000 shares
for an aggregate price of $275,000 ($.10 per share)
pursuant to its private placement offering made
pursuant to the exemption from registration provided
by Rule 504 of Regulation D promulgated under The
Securities Act of 1933, as amended, to five (5)
private investors, each of whom paid cash for his
shares.
(iii) In October and November 1995, the Company issued
1,449,878 shares for an aggregate price of $724,939
($.50 per share) pursuant to its private placement
offering made pursuant to the exemption from
registration provided by Rule 504 of Regulation D
promulgated under The Securities Act of 1933, as
amended, to 65 private investors. Each of these
investors paid cash for their shares, except that one
investor rendered consulting services therefor.
On August 18, 1995, the Company duly adopted a stock option plan
pursuant to which options to purchase up to 10,000,000 shares of the Company's
common stock may be granted by a committee of directors to key employees and
others. Each option will have a term not to exceed ten years and will be
exercisable at the per share fair market value of the Company's Common Stock as
at the date of grant. Effective August 18, 1995, the Company granted to 18
persons options to purchase an aggregate of 9,270,000 shares of its common stock
(4,980,000 of which are presently exercisable) at a price of $.05 per share,
being the fair market value of such shares as at the time such options were
granted. As of April 30, 1996, none of such options had been exercised.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporate Law ("GCL") of the State of
Delaware empowers a Delaware corporation, such as the Company, to indemnify its
directors and officers under certain circumstances. The Company's Certificate of
Incorporation provides that the Company shall indemnify such persons to the
fullest extent permitted by Delaware law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers and
controlling persons of the Company pursuant to the provisions of Delaware law or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in said Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit, or
proceeding) is asserted by a director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
- 17 -
<PAGE>
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in said Act and will
be governed by the final adjudication of such issue.
Article Seventh of the Company's Certificate of Incorporation
provides that the Company's Directors shall not be liable to either the Company
or its stockholders for monetary damages for breach of fiduciary duties unless
the breach involves: (i) a director's duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) liability for
unlawful payments of dividends or unlawful stock purchase or redemption by the
Company, or (iv) a transaction from which the director derived an improper
personal benefit.
- 18 -
<PAGE>
PART F/S
ITEM 1. FINANCIAL STATEMENTS.
(a) The following is a list of each Financial Statement filed under Item
13 of this Registration Statement.
1. Audited Financial Statements consisting of the Company's
consolidated balance sheet as at January 31, 1996 and 1995,
the end of its last two fiscal years, and related statements
of income, cash flow and changes in stockholder equity for the
years ended January 31, 1996 and 1995, as audited by Bromberg
& Associates, independent certified public accountants, along
with their report thereon.
2. Audited, Financial Statements of the Company's
predecessor, JJAMP consisting of JJAMP's balance sheet as at
January 31, 1995 and 1994 and related statements of income,
cash flow and changes in stockholder equity for the year ended
January 31, 1995 and four months ended January 21, 1994, as
audited by Bromberg & Associates, independent certified public
accountants, along with their report thereon.
- 19 -
<PAGE>
TREASURY INTERNATIONAL, INC.
FINANCIAL STATEMENTS
JANUARY 31, 1996
<PAGE>
1177 Finch Avenue West Suite 21
BROMBERG & ASSOCIATE Downsview, Ontario M3J2E9
-------------------- Office: (416)663-1974
CHARTERED ACCOUNTANTS Fax: (416)630-1345
AUDITORS' REPORT
TO THE SHAREHOLDERS OF TREASURY INTERNATIONAL, INC.
We have audited the consolidated balance sheets of Treasury International,
Inc. as at January 31, 1996 and 1995, and the consolidated statements of
income retained earnings, and changes in financial position for the years
then ended. These consolidated financial statements are the responsibility
of the corporation's management. Our responsibility is to express an opinion
of these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in Canada. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated 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 consolidated financial statements present fairly, in all
material respects, the financial position of the corporation as at January
31, 1996 and 1995 and the results of its operations and changes in its
financial position for the years then ended in accordance with generally
accepted accounting principles.
/s/ Bromberg & Associates
CHARTERED ACCOUNTANTS
TORONTO, CANADA
March 7, 1996
2
<PAGE>
TREASURY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
AS AT JANUARY 31, 1996
(U.S. DOLLARS)
ASSETS
<TABLE>
<CAPTION> 1996 1995
--------- ---------
<S> <C> <C>
Current
Cash and short term-deposits $292,611 $ 3,401
Accounts receivable 180,304 68,349
Inventories (Note 1b) 117,838 79,496
Prepaid expenses 1,852 2,479
---------- --------
592,605 153,725
Non-current
Capital (Note 1c & 4) 10,972 10,979
Deferred costs (Note 1d & 5) 565,013 --
---------- --------
$1,168,590 $164,704
---------- --------
---------- --------
LIABILITIES
Current
Accounts payable 49,317 101,565
Income taxes payable 6,692 --
Advances by shareholders (Note 10) -- 71,267
---------- --------
56,009 172,832
---------- --------
SHAREHOLDERS' EQUITY
Share capital (Note 6)
Authorized
20,000,000 Common Shares at $.0001
Issued
12,223,690 Common Shares 1,222 44
Contributed surplus (Note 7) 1,077,866 --
Retained Earnings 33,493 (8,172)
---------- --------
1,112,581 (8,128)
---------- --------
$1,168,590 $164,704
---------- --------
---------- --------
</TABLE>
APPROVED ON BEHALF OF THE BOARD
- ------------------------
Director
- ------------------------
Director
3
<PAGE>
TREASURY INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED JANUARY 31, 1996
(U.S. DOLLARS)
1996 1995
BALANCE, BEGINNING OF YEAR $ ( 8,172) $ ( 37,907)
NET INCOME FOR THE YEAR 41,665 29,735
--------- ----------
BALANCE, END OF YEAR $ 33,493 $ ( 8,172)
========= ==========
4
<PAGE>
TREASURY INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED JANUARY 31, 1996
(U.S. DOLLARS)
1996 1995
Sales $1,110,736 $ 669,718
Cost of Sales 667,083 407,188
Operating, general
and administrative expenses 392,594 230,051
Depreciation expense 2,702 2,744
----------- ---------
1,062,379 639,983
----------- ---------
INCOME BEFORE INCOME TAXES 48,357 29,735
----------- ---------
INCOME TAXES 9,188 7,313
----------- ---------
INCOME BEFORE UNDERNOTED ITEM 39,169 22,422
INCOME TAX REDUCTION ARISING FROM
LOSS CARRYFORWARD 2,496 7,313
----------- ---------
NET INCOME $ 41,665 $ 29,735
=========== =========
5
<PAGE>
TREASURY INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE YEAR ENDED JANUARY 31, 1996
(U.S. DOLLARS)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Funds Provided
Operating Activities
Net income $ 41,665 $ 29,735
Item not affecting cash
Depreciation 2,702 2,744
---------- --------
44,367 32,479
Net changes in non-cash operating
elements of working capital (195,226) (34,516)
----------- ---------
(150,859) ( 2,037)
----------- --------
Financing Activities
Proceeds from issue of
Common Shares 1,178 -
Advances by shareholders ( 71,267) 10,521
Contributed surplus 1,077,866 -
--------- -------
1,007,866 10,521
--------- -------
Investing Activities
Purchase of capital assets ( 2,695) ( 5,539)
Deferred costs (565,013) -
--------- -------
567,708 ( 5,539)
--------- -------
Increase in cash and short-term
deposits 289,210 2,945
--------- -------
Cash and short-term deposits
Beginning of year 3,401 456
--------- -------
Cash and short-term deposits
End of year $ 292,611 $ 3,401
--------- -------
--------- -------
</TABLE>
6
<PAGE>
TREASURY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT JANUARY 31, 1996
(U.S. DOLLARS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of consolidation:
These consolidated financial statements include the accounts of the
corporation and its wholly-owned subsidiary, J.J.A.M.P. Treasury
International Corp.
(b) Inventories:
Inventories are valued at the lower of cost (first-in, first-out
method) and net realizable value.
(c) Capital assets:
Capital assets are recorded at cost less accumulated depreciation.
Depreciation is provided using the declining balance basis at the
following annual rate:
Office furniture and equipment - 20%
(d) Deferred costs:
The deferred costs are being amortized over a four year period.
2. Incorporation:
The corporation was incorporated on August 18, 1995 in the state of
Delaware.
3. Business combination:
On August 18, 1995 the corporation acquired 100% of the issued and
outstanding shares of J.J.A.M.P. Treasury International Corp. in
exchange for 8,023,812 common shares of the corporation. The
effective date of the transaction was August 1, 1995.
4. Capital assets:
1996 1995
------------------------------------- ----------
ACCUMULATED NET NET
COST DEPRECIATION BOOK VALUE BOOK VALUE
------ ------------ ---------- ----------
Office furniture
and equipment $16,822 $5,850 $10,972 $10,979
7
<PAGE>
TREASURY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT JANUARY 31, 1996
(U.S. DOLLARS)
5. Deferred Costs
Deferred costs consist of expenditures incurred for the
development, expansion and progress of the corporation.
6. Statement of changes in shareholders' equity
COMMON STOCK
PAID-IN
SHARES CAPITAL
------ -------
Common stock issued
in exchange for the assets
and liabilities of J.J.A.M.P.
Treasury International Corp.
in August 1995 8,023,812 $ 802
Issuance of stock in
August 1995 in connection
with a private placement
offering 2,750,000 275
Issuance of stock in
August, September and
October 1995 with a
private placement offering 985,578 99
Issuance of stock in
November 1995 with a
private placement offering 464,300 46
---------- -------
12,223,690 $ 1,222
---------- -------
---------- -------
7. Contributed Surplus
Contributed surplus represents the premium paid on the
issuance of the Common Shares.
8. Claims and Lawsuits
The company does not have any claims or lawsuits filed or
pending against it.
8
<PAGE>
J.J.A.M.P. TREASURY INTERNATIONAL CORP.
FINANCIAL STATEMENTS
JANUARY 31, 1995
<PAGE>
7550 Torbram Road
Mississauga, Ontario
BROMBERG & ASSOCIATES L4T 3L8
- -------------------- Tel.: (905) 678-6680
CHARTERED ACCOUNTANTS Fax: (905) 678-6884
AUDITORS' REPORT
TO THE SHAREHOLDERS OF J.J.A.M.P. TREASURY INTERNATIONAL CORP.
We have audited the balance sheet of J.J.A.M.P. Treasury International Corp.
as at January 31, 1995 and the statements of operations, deficit and changes
in financial position for the year 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 January 31, 1995 and
the results of its operations and the changes in its financial position for
the year then ended in accordance with generally accepted accounting
principles.
/s/ BROMBERG & ASSOCIATES
CHARTERED ACCOUNTANTS
MISSISSAUGA, Ontario
April 9, 1995
2
<PAGE>
J.J.A.M.P. TREASURY INTERNATIONAL CORP.
BALANCE SHEET
AS AT JANUARY 31, 1995
(U.S. DOLLARS)
ASSETS
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Current
Cash $ 3,401 $ 459
Accounts receivable 68,349 29,050
Inventory (Note 1) 79,496 29,719
Prepaid expenses 2,479 1,965
-------- -------
153,725 61,193
Non-current
Capital 10,979 8,184
Incorporation costs -- 707
-------- -------
$164,704 $70,084
-------- -------
-------- -------
LIABILITIES
Current
Accounts payable $101,565 $ 47,201
Advances by shareholders (Note 3) 71,267 60,746
-------- -------
172,832 107,947
-------- -------
SHAREHOLDERS' DEFICIENCY
Share capital
Authorized
Unlimited Common Shares
Issued
60 Common Shares 44 44
DEFICIT
(8,172) (37,907)
-------- -------
(8,128) (37,863)
-------- -------
$164,704 $70,084
-------- -------
-------- -------
</TABLE>
APPROVED BY THE BOARD
- ---------------------------
Director
- ---------------------------
Director
3
<PAGE>
J.J.A.M.P. TREASURY INTERNATIONAL CORP.
STATEMENT OF DEFICIT
YEAR ENDED JANUARY 31, 1995
(U.S. DOLLARS)
1995 1994
BALANCE, BEGINNING OF YEAR $ (37,907) $ --
INCOME (LOSS) FOR THE YEAR 29,735 (37,907)
--------- ---------
BALANCE, END OF THE YEAR $ (8,172) $ (37,907)
========= =========
4
<PAGE>
J.J.A.M.P. TREASURY INTERNATIONAL CORP.
STATEMENT OF INCOME
YEAR ENDED JANUARY 31, 1995
(U.S. DOLLARS)
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Sales $ 669,710 $ 144,724
-------- --------
Cost of Sales 407,188 90,019
Operating, general
and administrative expenses 230,051 92,028
Depreciation expense 2,744 584
-------- --------
639,983 182,631
-------- --------
INCOME (LOSS) BEFORE INCOME TAXES 29,735 (37,907)
-------- --------
INCOME TAXES 7,313 --
-------- --------
INCOME (LOSS) BEFORE UNDERNOTED ITEM 22,422 (37,907)
-------- --------
INCOME TAX REDUCTION ARISING FROM
LOSS CARRYFORWARD 7,313 --
-------- --------
NET INCOME (LOSS) $ 29,735 $(37,907)
-------- --------
-------- --------
</TABLE>
5
<PAGE>
J.J.A.M.F. TREASURY INTERNATIONAL CORP.
STATEMENT OF CHANGES IN FINANCIAL POSITION
YEAR ENDED JANUARY 31, 1995
(U.S. DOLLARS)
1995 1994
CASH PROVIDED (USED) BY (FOR)
OPERATING ACTIVITIES
Net income (loss) $29,735 $(37,907)
Item not including a cash outlay
Depreciation 2,744 584
------- --------
32,479 (37,323)
Net changes in non-cash working capital 34,516 (13,533)
------- --------
Cash used for operating activities (2,037) (50,856)
FINANCING ACTIVITIES
Advances by shareholders 10,521 60,746
Share capital --- 44
------- --------
Cash provided by financing activities 10,521 60,790
------- --------
INVESTING ACTIVITIES
Purchase of capital assets (5,539) (8,768)
Incorporaiton costs --- (707)
------- --------
Cash used for investing activities (5,539) (9,475)
------- --------
NET INCREASE IN CASH 2,945 459
CASH--BEGINNING OF YEAR 456 ---
------- --------
CASH--END OF YEAR $ 3,401 $ 459
------- --------
------- --------
6
<PAGE>
J.J.A.M.P. TREASURY INTERNATIONAL CORP.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1995
(U.S. DOLLARS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Inventory is stated at the lower of cost (first-in, first-out
method) and net realizable value.
(b) Capital assets are recorded at cost less accumulated
depreciation. Depreciation is provided using the declining
balance method at the following annual rates:
Office furniture and equipment - 20%
2. CAPITAL ASSETS
1995 1994
---------------------------------- ----------
ACCUMULATED NET NET
COST DEPRECIATION BOOK VALUE BOOK VALUE
-------- ------------ ---------- ----------
Office furniture
and equipment $14,307 3,328 $10,979 $ 8,184
3. ADVANCES BY SHAREHOLDERS
The advances by shareholders are non-interest bearing and do not
have any fixed terms of repayment.
4. LOSS CARRY FORWARD
The company has a taxable loss of $4,261 which can be used to offset
future taxable income up to 2001.
7
<PAGE>
PART III
Item 1. INDEX OF EXHIBITS:
(a) Exhibit Index Page
------------- ----
2 Share Purchase & Exchange Agreement
(JJAMP) 37
3(i) Certificate of Incorporation 45
Amendment to Certificate of Incorporation 51
3(ii) By-Laws 53
4 1995 Stock Option Plan 62
10.1 January 3, 1995 - Exclusive Distribution
Contract with National Home Products Ltd 68
10.2 March 2, 1995 - Exclusive Distribution
Contract with Manicare Division/ AAI 70
10.3 March 15, 1995 - Letter Agreement with
Bernco Inc. regarding exclusivity with
respect to Spot Shot stain remover 72
10.4 May 15, 1995 - Exclusive Distribution
Contract with Tadiran Electronics
Industries Inc. 73
10.5 June 2, 1995 - Exclusive Distribution
Contract with Smart Tools Limited 78
21 Subsidiaries 80
- 35 -
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
TREASURY INTERNATIONAL, INC.
------------------------------
(REGISTRANT)
Date: May 9, 1996 By:
/s/ James Hal
------------------------------
Name: James Hal
Title: Chief Executive Officer
- 36 -
