UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-KSB
(Mark One)
X Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended January 31, 2000
OR
__ Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the transition period from __________ to _________.
Commission File Number: 0-28514
TREASURY INTERNATIONAL, INC.
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(Name of Small Business Issuer in Its Charter)
Delaware 98-0160284
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(State or Other Jurisdiction of Incorporation or (IRS Employer
Organization) Identification No.)
1081 King St., E 2nd Floor
Kitchener, Ontario N2G 2N1
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (519) 579-3424
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: None
Name of Each Exchange on which
Title of Each Class: registered:
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Common Stock, par value $0.0001 per share None
Check whether the registrant: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes |X| No __
<PAGE>ii
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [ ].
As of January 31, 2000, 95,101,777 shares of the registrant's common stock
were outstanding.
The aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of January 31, 2000 was $16,390,489.
Shares of Common Stock held by each executive officer and director and by each
person who beneficially owns more than 5% of the outstanding Common Stock have
been excluded in that such persons may under certain circumstances be deemed to
be affiliates. This determination of executive officer or affiliate status is
not necessarily a conclusive determination for other purposes.
<PAGE>1
PART I
The information set forth in this Report on Form 10-KSB including, without
limitation, that contained in Item 6, Management's Discussion and Analysis and
Plan of Operation, contains "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Actual results may materially differ from those projected in
the forward-looking statements as a result of certain risks and uncertainties
set forth in this report. Although management believes that the assumptions made
and expectations reflected in the forward-looking statements are reasonable,
there is no assurance that the underlying assumptions will, in fact, prove to be
correct or that actual future results will not be different from the
expectations expressed in this report.
ITEM 1. Description of Business
Overview
Treasury International, Inc.'s is focused on the development and
acquisition of proprietary assets in vertical markets that offer significant
growth potential. Treasury attempts to build shareholder value through an asset
management and acquisition strategy that targets companies where Treasury's
management, shareholders and corporate structure can be leveraged to improve
strategic market position, asset productivity and growth potential.
History
The Company was incorporated in the State of Delaware on August 18, 1995.
Following its formation, the Company acquired all of the issued and outstanding
shares of J.J.A.M.P. Treasury International Corp. ("JJAMP"), a Canadian
corporation based in metropolitan Toronto, Ontario, Canada. JJAMP was organized
on September 29, 1993 and until August 17, 1995, conducted its business under
the name "Treasury International." The acquisition of JJAMP was accomplished
through the issuance of 8,023,812 shares of the Company's Common Stock to
JJAMP's stockholders. JJAMP was dissolved on August 26, 1997 as part of the
Company's efforts to simplify its corporate structure. The operations of JJAMP
are now conducted through the Company.
On October 30, 1996, the Company acquired all of the issued and outstanding
common shares of Megatran, a Canadian company based in metropolitan Toronto,
Ontario that owns all of the issued and outstanding common stock of Mega Blow
Moulding Limited ("Mega Blow"). The purchase price for the Megatran shares was
$2,863,182, of which $2,111,302 was paid in cash and the balance was paid by
delivery of debentures in the original principal amount of $751,880, which
debentures are convertible into shares of the Company's Common Stock. On
December 1, 1998, the Company sold all of its equity interest in Mega Blow for
the amount of $4,250,000, of which $250,000 was paid in cash and the remaining
$4,000,000 is evidenced by a promissory note. This amount was restated by the
current management from the original price of $5,100,000.
<PAGE>2
On February 25, 1997 the Company acquired all of the outstanding capital
stock of Silver 925, Inc. ("Silver"), a Florida corporation based in Miami, at
an aggregate purchase price of $2,000,000, of which $200,000 was due as a cash
payment over a five-year period and $1,800,000 was to be paid in shares of
Treasury's common stock. On September 19, 1997, the Company entered into an
Agreement with James Hal, Silver and each of Moche Bendayan, Salomon Bendayan
and Edward Kozial (collectively, the "Purchasers"), pursuant to which the
Company resold to the Purchasers all of the outstanding shares of Silver's
common stock (the "Silver Shares"). In consideration for the repurchase of the
Silver Shares and in settlement of all obligations of the Company and James Hal
under the terms of that certain Agreement dated as of June 18, 1996, as amended
as of February 25, 1997, the Company issued to the Purchasers an aggregate of
752,500 shares of the Company's common stock.
On May 7, 1999, Treasury completed the purchase of Pioneer Media Group
("Pioneer"), a company that provides technology based marketing solutions (print
and Internet catalogs and end to end e-commerce enterprise solutions), digital
asset management and creative design for business to business communication.
Pioneer also develops Internet based enterprise commerce solutions that allow
companies to link their customers and vendors as well as integrate internal
applications on a variety of networks and platforms.
On May 7, 1999, Treasury repurchased 3,200,000 common shares of its capital
stock through its acquisition of Pioneer. Pioneer owned the shares prior to its
purchase by the Company.
On December 1, 1999, the Company purchased certain proprietary software
Assets, Code and Licenses from Virtual System Solutions Inc. of Wixom, Michigan
for an aggregate price of $182,446 plus additional development costs in the
amount of $55,839. The payment terms were equal payments of $25,000 in each of
November, 1999, December 1999 and January 2000; with a final payment of $163,285
due on February 29, 2000. As of March 1, 2000 all obligations under this
agreement have been met.
On October 4, 1999 the name of Pioneer Media Group was changed to Compelis
Corporation. Management believes that the new identity more accurately reflects
their future vision for the direction of the Company.
Compelis is a technology solution provider with the following proprietary
software assets and activities known as the Active Business Solutions family of
products: ActiveRMS, ActiveCommerce, ActiveCatalog, ActiveCD, ActiveDataBank and
ActiveHost. In addition, Compelis also provides creative design services which
address the Advertising, Marketing and Corporate Identity requirements of its
customers through ActiveDesign.
Compelis offers these products to its clients - manufacturers, distributors
and retailers - to help them share their corporate story, showcase their product
offerings and allow them to transact business with anyone, anywhere and at
anytime. Compelis offers its clients a single technology partner for
Internet-based Electronic Commerce (on-line shopping), Electronic Business
(online Request for Quote, Quoting, Purchase Order and trading co-operatives),
Internet-based Retail Management (including Point-of-Sale, Inventory Control,
Customer Database, Inventory Transfer & Allocation, Consolidated Chain
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Management and Reporting), Electronic Catalogs (Internet and CD ROM), Print
Catalogs, Brochures and Flyers, Creative Design including Corporate Web Sites
and Corporate Identity, Aggregated Industry Data and Information Asset
Management.
Active Business Solutions
The ABS family of products is based on leading open systems technology
(Microsoft Commercial Internet Systems MCIS), industry proven methodology and
more than a decade of design, implementation and support success. In addition,
Compelis offers technical expertise in all leading publishing software tools and
publishing solutions.
1. ActiveRMS
Today's retailer has much more to do than merchandise his store and select
the right products to be successful. Retailers need to become computer experts,
implementing the right hardware and software in a sophisticated infrastructure
that collects, stores and reports information on the product-mix, customers,
vendors, employees and stores activity - providing in a timely manner the
information needed to make the right decisions.
Developing and maintaining an effective computer infrastructure takes
skill, human resources, and a continual keeping abreast of technology; all of
which requires a great deal of time, effort and expense. The current technology
deployed by most retailers requires much support, is hardware resource
intensive, and restrictive in terms of flexibility, velocity and location.
Finally, the nature of today's installations creates significant inefficiencies
on an industry basis with each retailer maintaining independently vendor,
product and customer lists that are common to all and fails to effectively link
trading partners.
Compelis, as a retail information and technology provider, is successfully
addressing these various challenges by redefining how computer solutions are
implemented and utilized with leading-edge Internet-based technology, advanced
customer support, industry and vertical experience, and strategic relationships.
The Internet provides a cost-effective vehicle by which sophisticated software
applications can be developed, deployed and supported through ASP partners who
provide the technology infrastructure, hosting and support in an outsourced
model. With the growth in use and functionality of business to business Internet
systems, the opportunity to tie together trading partners (manufacturers,
distributors and retailers) as well as e-commerce (retailers and their
customers), ActiveRMS has the favourable position of being an early entrant in
the thin-client, Internet-based, retail systems market
- - POSNet - Point-of-Sale and Sales functions at store level.
- - StoreNet - Functions to manage store operations at the store level incl:
purchasing, receiving, reporting, employee maintenance, customer
maintenance, etc.
- - ChainNet - Functions to manage chain operations at the centralized level
incl: centralized purchasing, receiving, reporting, employee maintenance,
customer maintenance, store parameters, enterprise parameters, data
import/export, etc.
- - ReportsNet - Functions to provide centralized reporting available anywhere
at anytime.
- - RetailNet - Internet-based E-Commerce.
- - KioskNet - Customer Self Serve information and sales functions available at
store level as well as in remote locations.
- - RegistryNet - Internet-based Gift Registry.
- - SupplyNet - Internet-based E-Business.
<PAGE>4
As an outsourced Internet-based software solution, ActiveRMS generates
revenues from three sources: first, from Value Added Reseller (VAR) partners who
sell product licenses for each customer installation; second, Application
Service Provider (ASP) partners who host and support the ongoing technology
infrastructure requirements for ActiveRMS customers; third, from professional
services - custom programming, consulting and project management - billings to
meet the more sophisticated technology requirements of larger installations.
Ongoing revenues are generated from application hosting, help desk support
contracts and product training.
2. ActiveCommerce
Based on Microsoft's industry leading MS SQL database, industry specific
architecture and Internet Commerce Technology - ActiveCommerce is an advanced
Internet Commerce-Enabled product Catalog that allows customers to navigate
through your product offerings and then view or print in-depth product knowledge
as well as conduct numerous transactional processes:
- - E-Catalog - display even the most complex of products utilizing a dynamic
industry specific database structure allowing for unlimited categorization,
the use of an item matrix to present sku variations such as color, size,
depth, width, diameter, weight, clarity, etc. Associate item pictures,
product specification sheets, description and selling features as well as
related products.
- - E-Commerce - Allow customers to select items from your catalog and add them
directly to the order desk. Select shipping location and accept payment by
Visa, MasterCard, Amex and other tender methods - with online payment
authorization.
- - E-Business - Customers can now request price and availability quotes online
freeing up order desk resources. Electronically respond to the RFP,
automatically generating and emailing a formal quote that you customer can
turn into a PO at the "click of an icon".
- - Ad Space - Now you have the opportunity to sell ad space on your website to
your suppliers and other 3rd parties. Customize the frequency of display,
size of ad and the target audience to build additional revenue points in
your site.
- - Auction - Allows hosting of live auctions. Enables sites to auction
products, accept bids, and determine winners. Users can set reserve prices,
minimum bids, start and end dates, bid increments, and resolve bid
conflicts. Users can also notify auction participants of important news via
DHTML, HTML, or e-mail at any interval.
Compelis generates revenues from three sources with ActiveCommerce: first,
from the sale of product licenses for each installation; second, from the
creation of content for the e-commerce solution; third, from the integration of
a company's e-commerce initiative with back-end office systems.
3. ActiveCatalog
At the core of every commerce solution is the product catalog. Creative
Design, Industry and Product knowledge, Print Publishing expertise and
Aggregated Industry Databases result in high-quality, unique and effective print
catalogs. It is designed to promote corporate image, make product selection easy
for your customer and extend the reach and effectiveness of your sales and
marketing effort.
Compelis generates revenue from the creation of content in the catalog -
both text and images - plus from the management of print or output to other
media. All printing is outsourced through 3rd party sources.
<PAGE>5
4. ActiveCD
Product catalog in electronic format on CD-ROM. Two CD products allow
Compelis' customers to tailor their CD's functionality to meet both their
marketing requirements and their customers needs.
- - PDF Explorer - Utilizing the industry standard Adobe Acrobat Reader,
Compelis compiles print catalog pages in the PDF format indexed for both
word and category searches allowing easy navigation with creative design
attributes that allows for a look and feel tailored to support our client's
image and message.
- - Contractor's Companion - Distributes product catalogs in a MS Access
Database with an easy-to-use application that can be installed on your
customers PC. Your customer will be able to use an extensive search engine
to easily locate any product, review sales features, view a product picture
and generate a Purchase Order that can printed, faxed or emailed.
Compelis generates revenue from the programming of the CD, the creation of
the CD's interface and the CD's content creation. All CD replication is
outsourced through 3rd party sources.
5. ActiveDataBank
Compelis has taken the time and expense out of maintaining product
information in both your print and electronic catalogs through the management
(additions, changes and purges) of aggregated industry databases. These
databases contains product information from in excess of 300 leading
manufacturers of Industrial, Health and Safety, Material Handling, Fluid Power,
Fastener and Power Transmission products. From this database, Compelis publishes
print, CD-ROM and Internet based catalog solutions for its industrial customers
located across Canada. Compelis receives and reproduces information for the
database, using the latest technology tools, in the format required for the
target publishing media. Compelis is responsible for the maintenance of the
electronic information and the output applications.
Compelis generates revenues through subscription to the database by its
clients. Future revenues may be available from manufacturers whose product
information is hosted in the Compelis Data Bank.
6. ActiveHost
Compelis maintains and hosts Internet sites for its clients. These web
servers are located directly on high speed, reliable Internet networks. Compelis
provides secure servers for credit card processing through third party partners
who integrate with the ActiveCommerce solution.
Compelis generates revenue from monthly hosting fees calculated by the
amount of traffic and activity on a client's web site.
7. ActiveDesign
Compelis maintains a complete creative design service including corporate
identity, web page design, corporate brochures, logos, product literature,
business cards and letterhead. The combination of leading-edge technology and
high-end graphical presentation not only differentiates our clients from the
competition but helps to create buyer preference.
Compelis generates revenue through time and material billing for services
rendered.
The strength of Compelis is its ability to provide customers with a
complete end-to-end print, CD-ROM and Internet publishing solution. Compelis'
current target markets include distributors and manufacturers of industrial,
<PAGE>6
maintenance repair and operation, fastener, fluid power, power transmission,
electrical, plumbing, occupational health and safety products.
Company information can be found at the following web sites
www.compelis.com and www.treyinvestor.com. Further the Company has launched its
demomonstration site for ActiveCommerce at www.commerceIS.com. to demonstrate
the functional capabilities of software. It is populated with product
information from leading industrial product manufacturers and gives Compelis a
strategic advantage in the evolution of e-commerce and e-business for the
Industrial Supply ("IS") and Maintenance Repair and Operation ("MRO") markets.
Compelis maintains its proprietary database and provides access through
subscription to its customers, reducing the total cost of ownership and support
for implementers of these technologies.
The Company's principal executive offices are located at 1081 King Street,
E 2nd Floor, Kitchener, Ontario, Canada N2G 2N1, and its telephone number is
(519) 579-3424.
Corporate Summary and Growth Strategies
Treasury has refocused its mandate on creating shareholder value by
acquiring and/or building companies or proprietary assets that provide revenue
opportunities and which yield long term growth potential in asset value.
The following objectives define Treasury's strategies:
1. Strategic Market Position. Through initiatives such as database
catalog publishing and dynamic E-commerce and E-business Internet
development, Treasury is an early entry into the rapidly developing
Internet and information asset management arena. Our competitive
advantages include our ability to adapt to the changing technological
environment and the implementation of business solutions that leverage
Compelis' proprietary information database. Treasury will continue to
seek strategic alliances that provide new revenue streams, technical
capabilities and enhanced opportunities to capture market share.
2. Asset Productivity. The consolidation of corporate activities has
allowed us to focus our energy and resources on emerging
opportunities, accountable and complimentary to Treasury's mandate.
The resulting synergies from consolidation and the organization's new
and more efficient business processes yields higher velocity within
transactions, shorter time in getting products to market and better
return for each asset dollar investment.
3. Growth Potential. The Internet and other emerging technologies have
and will continue to have a tremendous impact on today's businesses.
In particular, the rate at which information is exchanged will affect
a company's productivity, profitability and survival. Management
believes that Treasury is well positioned to provide beneficial
technology-based business solutions that provide focus our customers
on awareness (products and capabilities), preference (name and brand
recognition) and market share. Treasury will respond to identifiable
<PAGE>7
high yielding growth opportunities where we can capture revenue stream
and market share through leveraging our asset base.
Research and Development Costs
The Company, as a software development provider, does incur expenditures on
account of research and development. During this reporting period the Company
spent $233,540 on Research and Development. Management believes that the success
of the Company and its business operations will require continued expenditures
in this area; however, these expenditures can be managed within reasonable
correlation to operating revenues and asset building activities. These
expenditures could have a material affect on cash flow in the coming year.
Employees
As of January 31, 2000, the Company had sixteen full time employees: two
officers, 4 sales and marketing representatives, 1 administrator and 9
production/development personnel. The Company also contracts up to nineteen
programmers in India, on an as needed basis, for software coding, programming
and software development. None of the Company's employees are represented by a
labor union or are subject to a collective bargaining agreement. The Company
considers its relations with its employees to be good.
Patents and Trademarks
The Company has applied for Trademark protection on the following business
names and activities: Active Business Solutions, ActiveCommerce, ActiveRMS,
ActiveRetail and ActiveCatalog.
ITEM 2. Properties
The Company leases 2,200 square feet of space in Kitchener, Ontario, Canada
as administrative offices and production facilities at a rental rate of $1300
(Canadian Dollars) per month. The current lease period expires on August 31,
2001, with an option to renew until August 31, 2003.
In addition the Company utilizes sales offices in Wixom, Michigan and Port
Orchard, Washington. The use of these offices are provided by Messrs. Dale Doner
and Mark Murphy, directors of the Company, on a month to month basis at no cost.
<PAGE>8
ITEM 3. Legal Proceedings
The Company is not currently engaged in any legal proceedings and is not
aware of any pending or threatened litigation that could have a material adverse
effect on the Company's business, financial condition or results of operations.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None
PART II
ITEM 5. Market For Common Equity and Related Stockholder Matters
In December 1995, the Company's Common Stock commenced trading on the
NASDAQ "pink sheets" under the symbol "TREY." On April 12, 1996, the Common
Stock of the Company was approved for trading on the NASDAQ-OTC Electronic
Bulletin Board. The following table sets forth the range of high and low closing
representative bid prices for the Company's Common Stock from December, 1997
through January 31, 2000 (as reported by NASDAQ), which represent inter-dealer
prices, without retail mark-up, mark-down or commission and may not reflect
actual transactions:
Quarter Ended High Bid Low Bid
----------------- --------- -------
April 30, 1997 $0.31 $0.19
July 31, 1997 $0.20 $0.20
October 31, 1997 $0.06 $0.06
January 31, 1998 $0.15 $0.142
April 30, 1998 $0.046 $0.039
July 31, 1998 $0.13 $0.125
October 31, 1998 $0.09 $0.085
January 31, 1999 $0.08 $0.08
April 30, 1999 $0.06 $0.055
July 31, 1999 $0.14 $0.13
October 31, 1999 $0.10 $0.09
January 31, 2000 $0.28 $0.25
As of March 21, 2000, there were 164 holders of record of the Company's
Common Stock. The Company has not declared or paid any cash dividends on its
Common Stock since its inception, and its Board of Directors currently intends
to retain all earnings for use in the business for the foreseeable future. Any
future payment of dividends will depend upon the Company's results of
operations, financial condition, cash requirements and other factors deemed
<PAGE>9
relevant by the Company's Board of Directors.
ITEM 6. Management's Discussion and Analysis or Plan of Operation
Overview
Treasury International, Inc. is an asset management company whose mandate
is to create shareholder value by acquiring and/or building companies or
proprietary assets that provide revenue opportunities and which yield long term
growth potential in asset value. Treasury's operations are primarily located in
North America.
During the next 12 to 24 months, Treasury intends to continue its expansion
goals. Management believes that through its strategies it will achieve the
following objectives: i) gain strategic position for its subsidiaries, ii)
improve asset productivity and iii) improve growth potential in both emerging
technologies and key targeted vertical market sectors. To increase its
subsidiaries' market share, the Company will seek to acquire key competitors,
companies and assets having important products and synergies with existing
company operations.
Highlights of Significant Events
The changes to the Company's management team has brought a new business
vision for the restructuring of Treasury's financial state as well as operating
activity. With the new direction at the Company, Treasury has seen increased
shareholder value, increased market valuation and increased liquidity.
Management believes the Company is now ready to realize strong growth in revenue
and market share within its operating entities.
The purchase of Pioneer Media Group (now known as Compelis Corporation)
cast a new vision and direction for Treasury and brought business activity in
the exciting and emerging Internet E-commerce and E-business field.
As well, through the acquisition of Pioneer, Treasury also repurchased
3,200,000 shares of its common stock owned by Pioneer prior to the transaction.
These repurchased shares are retained as treasury shares for future purposes.
Management believes that the acquisition of new software assets now known
as ActiveRMS and ActiveCommerce opens new avenues for revenue generation and
asset appreciation. These assets are at the core of Treasury's Internet strategy
and management believes represent significant opportunities for growth.
The restructuring of the Mega Blow sale was a necessary event during the
1999 fiscal year. It became apparent to current management that the original
agreement and representations to Treasury shareholders were not going to be
realized. It was necessary to be flexible and protect the Company's interests as
much as possible in the re-negotiation of the outstanding balance of the
promissory note due from this transaction. Management is still hopeful that some
<PAGE>10
positive contributions will come from this transaction during the upcoming
fiscal 2000 year. To date the Company has received an initial deposit of
$250,000 in December 1998, $110,000 in cash payments against the promissory note
and also a $1,394,266 credit to retire the Company's long-term debt.
These are all positive results coming form the Company's activities during
the past fiscal year.
The following discussion should be read in conjunction with the
Consolidated Financial Statements of the Company included in this annual report.
Fiscal 2000 compared to Fiscal 1999
Comparative year over year results are impacted by the Company's sale of
Mega Blow Mouldings Ltd. ("Mega Blow"). The Company's previous year results
included nine months of operating activity at Mega Blow prior to the sale of the
asset in December 1998; these were represented in the results shown on the
Company's fiscal 1999 statements. Mega Blow was the Company's only operating
subsidiary prior to its sale.
Total revenues decreased during fiscal year 2000 to $999,086, down
approximately 72% from $3.6 million in fiscal year 1999. Operating revenues
include activity from Compelis Corporation the Company's only operating
subsidiary in the past fiscal year. Revenues from Compelis showed a 148%
increase during this fiscal year when compared with their previously privately
held results. The company continues to see strong demand for its products and
services and an increase in its current work in progress backlog. These key
indicators are expected to continue during the upcoming fiscal year.
The Company experienced net income of $229,111 for its fiscal year ended
January 31, 2000, a decrease from the Company's net income of $2,158,635 in
fiscal year ended January 31, 1999. Again this result is affected by the sale of
Mega Blow in fiscal 1999 where the Company realized a net gain of $2,811,231 on
the disposition of this asset. The net gain has since been restated as
$1,961,231.
The cost of sales for fiscal 2000 represented 64% of revenue generated from
operations and is expected to improve in fiscal 2001 as the company improves its
development process and realizes new revenues from the software assets it
develops and markets.
Operating, general and administrative expenses decreased in fiscal 1999 to
$520,845, or approximately 52% of total revenues. Included is the settlement of
two outstanding judgments against the Company from the Silver 925 acquisition in
the amount of $39,267. In addition, costs for the ongoing operations and
administration of the public company are included.
Fiscal 1999 compared to Fiscal 1998
Net sales decreased during fiscal year 1999 to $3.6 million, down
approximately 42% from $6.1 million in fiscal year 1998. The decrease in net
sales reflects the inclusion of only nine months' of the results of operations
of Mega Blow, a former subsidiary, compared to twelve months in 1998. The
Company experienced a net income of $2,158,635 for its fiscal year ended January
31, 1999, an increase of approximately 241% when compared to the Company's net
loss of $1,529,782 in fiscal year ended January 31, 1998. Among the significant
<PAGE>11
items impacting the 1999 results were the net gain of $2,811,231 realized on the
sale of Mega Blow that occurred on November 30, 1998.
The cost of sales for fiscal 1999 represented 76% of net sales, or
$2,714,875, representing nil change compared to 76% of net sales, or $4,628,960,
in fiscal 1998.
Operating, general and administrative expenses decreased in fiscal 1999 to
$1,446,337, or approximately 40% of sales, compared to $2,126,998, or
approximately 35% of sales, in fiscal 1998. The decrease is attributable to the
inclusion of only ten months' results of operations of Mega Blow in fiscal year
1999, compared to twelve months' results of operations in fiscal year 1998.
Liquidity and Capital Resources
The primary sources of liquidity for the Company were funds generated from
the sale of Mega Blow and cash flow from the operations of Compelis Corporation.
On October 30, 1996, the Company acquired 100% of the issued and
outstanding common shares of Megatran Investments Ltd., parent company of Mega
Blow. The purchase price of $2,863,182 consisted of $1,361,302 cash and
debentures of $1,501,880. Subsequently, on November 30, 1998, the company sold
Mega Blow for $4,250,000, of which $250,000 was received as a deposit,
$4,000,000 and as a promissory note. On November 7, 1999 the Company received
payment on the promissory note outstanding of $1,394,266 in the form of a credit
and release of its long-term debt obligations of $1,240,602 plus interest
accrued in the amount of $153,664 to Mega Blow. The Company also received two
payments during the 2000 fiscal year on the promissory note - June 30, 1999 in
the amount of $10,000 and January 31, 2000 in the amount of $100,000.
As of January 31, 2000, current assets totaled $668,138 compared to
$873,054 at January 31, 1999. A one-time adjustment for activity in a previous
period of $850,000 was booked in the second quarter adjusting the sale price of
Mega Blow. On November 30, 1998 the sale of MBML was inaccurately reported by
previous management to include an $850,000 note receivable in addition to the
$250,000 non-refundable deposit plus the $4,000,000 Promissory Note ("Note")
being held from the purchasers, for an aggregated sale price of $5,100,000. Upon
further review, subsequent to the year ended January 31, 1999, it was the
opinion of management that this adjustment was required to more accurately state
the amount realizable from the sale of Mega Blow as $4,250,000 not the
$5,100,000 previously reported. This decrease impacted the January 31, 1999
accounts receivable amount shown as $850,000. Accounts receivable totaled
$662,531 on January 31, 2000 compared to the restated $0 as of January 31, 1999
and represent trade receivables plus the interest accrual on the outstanding
amount the promissory note due from the sale of Mega Blow. Management continues
to negotiate with the purchasers of Mega Blow in order to achieve the successful
completion to this transaction.
As of January 31, 2000, current trade payables at Compelis and Treasury
totaled $153,839. The Company's current portion of long term debt, due over
various periods in this year, are Notes payable to individuals and have
negotiable due dates based on mutually agreed upon terms. At fiscal year end
2000, the Company owed $56,547 on its $68,000 operating line of credit with the
Royal Bank of Canada.
<PAGE>12
The Company believes it will generate sufficient positive cash flow from
operations to meet its requirements for the next twelve months. However, there
can be no assurance that the Company will be able to realize on its promissory
note and accounts receivable and therefore be able to repay its debts. If the
funds available from the promissory note and accounts receivable, together with
its current cash and cash equivalents are not sufficient to meet the company's
cash needs the Company may, from time to time, seek to raise capital from
additional sources. These include, but are not limited to, expanding its current
lending facilities and/or establishing new lending facilities, project-specific
financings and additional public or private debt or equity financings.
ITEM 7. Financial Statements
The financial statements of the Company, including the notes thereto,
together with the report of Bromberg & Associate, independent certified public
accountants thereon, are presented beginning at page F-I.
ITEM 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
The following table provides information concerning each executive officer
and director of the Company. All directors hold office until the next annual
meeting of Stockholders or until their successors have been elected and
qualified.
NAME AGE TITLE
- ---------------- ------- -------------------------------------------
Dale Doner 44 Chief Executive Officer, President and
Chairman of the Board
Marlin Doner 34 Chief Operating Officer, Chief Financial
Officer and Director
Lawrence Zeiben 33 Director
Mark Murphy 38 Director
Messrs. Dale Doner and Marlin Doner are brothers.
<PAGE>13
Mr. Dale Doner has been the Chief Executive Officer, President and Chairman
of the Board of Treasury since January 22, 1999. Since 1992 as an independent
business consultant, Mr. Doner has directed corporate mergers, acquisitions and
restructuring and been involved in public company turnarounds. In addition, Mr.
Doner and family operate a 960 acre foundation pedigree forge seed production
farm.
Mr. Marlin Doner has been the Chief Operating Officer and a director of
Treasury since March 1, 1999 and Chief Financial Officer since June 1, 1999. In
1993, Mr. Doner founded Pioneer Media Group, a leading Canadian publisher of
industrial catalogs. From 1987 to 1992 he was President of Pioneer Safety Inc.
("PSI"), a Canadian distributor of industrial and occupational health and safety
products. Upon the sale of the assets of PSI, Mr. Doner served as Marketing
Coordinator for the acquiring company. Mr. Doner received his Bachelor of
Economics from Wilfrid Laurier University in 1987. Since 1995, he has been a
director for the Evangelical Missionary Church of Canada.
Mr. Mark Murphy has been a director of Treasury since July 20, 1999. From
1990 to 1998, Mr. Murphy served as President of Virtual Systems Inc. where he
oversaw the product development and VAR channel management for an award winning
retail point of sale system. In 1998, Mr. Murphy established Virtual Systems
Solutions Inc. to provide custom software products and business automation
solutions. Mr. Murphy received his Bachelor of Economics from Albion College in
1982.
Mr. Lawrence Zeiben has been a director of Treasury since January 22, 1999.
From 1990 to 1995, Mr. Zeiben was a consultant in tax and estate planning. Since
1998, as President of Corporate Tax he has been controller for several
multi-national firms. Further, Mr. Zeiben has extensive knowledge of taxation,
corporate finance and strategic planning.
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) reports they file.
Based solely on a review of the copies of such reports furnished to the
Company during or with respect to the fiscal year ended January 31, 2000, or
written representations that no Forms 5 were required, the Company believes that
during the fiscal year ended January 31, 2000, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with, including each of the officers and
directors of the Company named above have filed initial statements of beneficial
ownership and have filed reports on Form 4 regarding transactions in the
securities.
ITEM 10. Executive Compensation
Summary Compensation Table
The following table sets forth the compensation for the last two years, for
each of (i) the Company's Chief Executive Officer during such fiscal years (ii)
each other executive officer of the Company whose compensation during such
fiscal years exceeded $100,000.
<PAGE>14
<TABLE>
<S> <C> <C> <C> <C>
Annual Compensation Long-Term Compensation
Fiscal Year ---------------------------------- -----------------------------
Name Ended Jan. 31 Annual Salary Annual Bonus Securities underlying options
- ------------------ --------------- --------------- --------------- -----------------------------
James Hal (1) 1999 $47,517 -- 200,000
Dale Doner(2) 1999 $15,000 -- --
Dale Doner 2000 $47,000 -- --
</TABLE>
(1) Resigned as CEO, President and Chairman of the Board on January 22, 1999.
(2) Appointed as CEO, President and Chairman of the Board on January 22, 1999.
Stock Option Grants
Dale Doner, the President and CEO of the Company, does not own any options.
On October 31, 1999 the Company granted to Marlin Doner, the Chief Operating
Officer of the Company, options to purchase 900,000 shares of common stock at an
exercise price of $0.11 per share. These options terminate on October 31, 2002.
The exercise price was the Fair Market Value of the common stock on the date of
grant.
Directors' Compensation
The Company's policy is not to pay compensation to directors who are also
employees of the Company for their service as directors. Additionally,
non-employee directors do not presently receive compensation for their service
as directors. The Company will, however, reimburse directors a fixed amount for
out-of-pocket expenses incurred for attendance at meetings.
ITEM 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information with respect to the beneficial
ownership of the outstanding Common Stock of the Company as of January 31, 2000
by (i) each director of the Company, (ii) each executive officer of the Company
and each executive officer of the Company named in the Summary Compensation
Table above, (iii) each person known by the Company to own more than 5% of the
Company's Common Stock and (iv) all directors and officers as a group:
<TABLE>
<S> <C> <C>
Name and Address Beneficial Ownership of Common Stock Current Percent of Class (1)
------------------------------------- -------------------------------------------------- --------------------------------
Dale Doner
1081 King St., E 28,004,599 29%
Kitchener, Ontario
Canada N2G 2N1
<PAGE>15
Name and Address Beneficial Ownership of Common Stock Current Percent of Class (1)
------------------------------------- -------------------------------------------------- --------------------------------
Marlin Doner
1081 King St., E 3,830,000 4%
Kitchener, Ontario
Canada N2G 2N1
Mark Murphy
37630 Interchange Dr., 3,929,000 4%
Farmington Hills, MI
USA 48335
All directors, executive officers,
as a group (4): 35,763,599 37.6%
</TABLE>
- ------------------------------------------
(1) Computed on the basis of 95,101,777 shares of Common Stock and, with
respect to those persons holding options to purchase Common Stock
exerciseable within 60 days, the number of shares of Common Stock that are
issuable upon the exercise thereof.
ITEM 12. Certain Relationships and Related Transactions
On May 5, 1999 the Company realized the repurchase of 3,200,000 of its
common stock through its acquisition of Pioneer Media Group. The common stock
was an asset of Pioneer prior to Treasury's purchase of the company.
ITEM 13. Exhibits, List and Reports on Form 8-K
(a) Exhibits
3.1 Certificate of Incorporation of the Company, as amended*
3.2 By-Laws of the Company.*
4.1 Form of Junior 0% Convertible Subordinated Debenture due October 30,
1999.**
4.2 Form of Series A Senior Convertible Subordinated Debenture due October 29,
1997**
4.3 Form of Series A Senior Convertible Subordinated Debenture due October 29,
1997**
10.1 Treasury International, Inc. 1995 Stock Option Plan.*
10.2 Stock Purchase Agreement, dated as August 11, 1998 and amendment thereto
dated as of September 30, 1998, by and between Treasury International, Inc.
and 1299004 Ontario Corporation.***
<PAGE>16
21 Subsidiaries of the Company
23.1 Consent of Bromberg & Associate
27.0 Financial Data Schedule
* Incorporated by reference from the Company's Registration Statement on Form
10-SB, as amended, originally filed with the SEC on October 21, 1996.
** Incorporated by reference from the Company's Quarterly Report on Form
10-QSB, as filed with the SEC on December 20, 1996.
*** Incorporated by reference from the Company's Current Report on Form 8-K, as
filed with the SEC on May 27, 1999.
(b) Reports on Form 8-K
None.
<PAGE>17
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TREASURY INTERNATIONAL, INC.
By: /s/ DALE DONER
-----------------------
Dale Doner
Chief Executive Officer
By: /s/ MARLIN DONER
-----------------------
Marlin Doner
Chief Financial Officer
Pursuant to the requirements of the Exchange Act, this Report has been
signed below by the following persons on behalf of the Company in the capacities
and on the date indicated.
Signature Title Date
- ----------------- ------------------------------------ ---------------
/s/ DALE DONER Chief Executive Officer, President May 9, 2000
---------------- and Chairman of the Board
Dale Doner
/s/ MARLIN DONER Chief Financial Officer May 12, 2000
---------------- and Director
Marlin Doner
/s/ LAWRENCE ZEIBEN Director May 12, 2000
----------------
Lawrence Zeiben
/s/ MARK MURPHY Director May 12, 2000
-----------------
Mark Murphy
<PAGE>18
TREASURY INTERNATIONAL, INC.
CONSOLIDATED FINANCIAL STATEMENTS
AS AT JANUARY 31, 2000
INDEX
Page
Auditors' report.................................................... 1
Consolidated balance sheet.......................................... 2
Consolidated statement of deficit................................... 3
Consolidated statement of operations................................ 4
Consolidated statement of changes in shareholders' equity........... 5
Consolidated statement of cash flows................................ 6
Notes to consolidated financial statements.......................... 7-9
<PAGE>F-1
AUDITORS' REPORT
1183 Finch Ave.West, Suite 305
BROMBERG & ASSOCIATE Toronto, Ontario M3T 2G2
CHARTERED ACCOUNTANTS Phone: (416) 663-7521
Fax: (416) 663-1546
Board of Directors and Shareholders
Treasury International, Inc.
We have audited the consolidated balance sheets of Treasury International,
Inc. as at January 31, 2000 and 1999, and the consolidated statements of
operations, deficit, shareholders' equity and cash flows for the years then
ended. These consolidated financial statements are the responsibility of the
corporation's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 consolidated
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the corporation as at January
31, 2000 and 1999 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
BROMBERG & ASSOCIATE
CHARTERED ACCOUNTANTS
TORONTO, CANADA
April 20, 2000
<PAGE>F-2
Treasury International, Inc.
CONSOLIDATED BALANCE SHEET
AS AT JANUARY 31, 2000
ASSETS
<TABLE>
<S> <C> <C>
January 31, 2000 January 31, 1999
------------------- --------------------
CURRENT
Bank $ - $ 19,956
Accounts Receivable 662,531 850,000
Due from Wexcap Group 3,000 -
Sundry Assets 2,607 3,098
------------------- --------------------
TOTAL CURRENT ASSETS 688,138 873,054
PROMISSORY NOTE RECEIVABLE (Note 3) 2,649,398 4,000,000
GOODWILL (Notes 2b & 4) 381,929 -
RESEARCH AND DEVELOPMENT COSTS (Notes 2c & 5) 160,002 -
CAPITAL ASSETS (Notes 2d & 6) 14,925 6,935
------------------- --------------------
TOTAL ASSETS $ 3,874,392 $ 4,879,989
=================== ====================
LIABILITIES
CURRENT LIABILITIES
Bank Indebtedness $ 56,547 $ -
Account Payable and Accrued Liabilities 153,839 83,807
Current portion of long-term debt (Note 7) 197,344 1,240,602
------------------- --------------------
$ 407,730 $ 1,324,409
LONG TERM DEBT (Note 7) 45,903 -
LOAN PAYABLE (Note 8) 43,772 -
------------------- --------------------
TOTAL LIABILITIES $ 497,405 1,324,409
------------------- --------------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL
Authorized
100,000,000 common shares
Issued
95,101,777 common shares (Note 9) 9,510 8,832
CONTRIBUTED SURPLUS (Note 10) 4,896,694 4,455,076
DEFICIT (Note 11) (1,529,217) (908,328)
------------------- --------------------
3,376,987 3,555,580
------------------- --------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 3,874,392 $ 4,879,989
=================== ====================
</TABLE>
<PAGE>F-3
Treasury International, Inc.
Consolidated Statement of Deficit
YEAR Ended JANUARY 31, 2000
<TABLE>
<S> <C> <C>
January 31, 2000 January 31, 1999
------------------ ------------------
Balance, Beginning of Year as restated ($908,328) ($3,066,963)
Adjustment to Selling Price of Mega Blow Moulding Limited ($850,000) -
(Note 12)
Net Income for the Year 229,111 2,158,635
------------------ ------------------
Balance, End of Year ($1,529,217) ($908,328)
================== ==================
</TABLE>
<PAGE>F-4
Treasury International, Inc.
Consolidated Statement of Operations
YEAR Ended JANUARY 31, 2000
<TABLE>
<S> <C> <C>
January 31, 2000 January 31, 1999
---------------- -----------------
REVENUE From Operations $ 363,272 $ 3,583,715
MANAGEMENT FEE INCOME 33,333 -
INTEREST INCOME 602,481 -
---------------- -----------------
TOTAL INCOME 999,086 3,583,715
COST OF GOODS SOLD 233,295 3,035,195
---------------- -----------------
GROSS PROFIT 765,791 548,520
EXPENSES
General and administrative 520,845 1,126,017
---------------- -----------------
INCOME (LOSS) FROM OPERATIONS BEFORE UNDER NOTED ITEM 244,946 (577,497)
Interest Expense 15,835 80,463
---------------- -----------------
NET INCOME (LOSS) Before Income Taxes $ 229,111 ($657,960)
Deferred Income Taxes - (5,364)
---------------- -----------------
NET INCOME (LOSS) from Operations $ 229,111 ($652,596)
NET GAIN from Sale of Subsidiary - 2,811,231
---------------- -----------------
NET INCOME $ 229,111 $ 2,158,635
---------------- -----------------
Income per Share $ 0.002 $ 0.03
================ =================
Weighted Average Number of Common Shares Outstanding 92,892,333 67,679,323
================ =================
</TABLE>
<PAGE>F-4
TREASURY INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
YEAR ENDED JANUARY 31, 2000
<TABLE>
<S> <C> <C> <C>
COMMON PAID-IN CONTRIBUTED
SHARES CAPITAL SURPLUS
------------ ---------- --------------
Balance - January 31, 1999 88,320,677 $ 8,832 $ 4,455,076
Issued 1,800,000 shares of common stock for cash 1,800,000 180 99,820
consideration of $100,000
Issued 3,200,000 shares of common stock for all of 3,200,000 320 191,680
the outstanding issued shares of Compelis Corporation
(formerly Pioneer Media Group) ------------ ---------- --------------
Balance-July 31, 1999 93,320,677 $ 9,332 $ 4,746,576
Issued 600,000 shares of common stock in 600,000 60 23,940
consideration for the reduction of the notes payable
by $24,000 ------------ ---------- --------------
Balance-October 31, 1999 93,920,677 $ 9,392 $ 4,770,516
Issued 400,000 shares of common stock in 400,000 40 39,960
consideration for the reduction of the notes payable
by $40,000
Issued 773,600 shares of common stock at $0.11 per 773,600 77 85,019
share under the Company's Employee Benefit Plan
Registration Statement of February 25, 1998.
Issued 7,500 shares of common stock at $0.16 per 7,500 1 1,199
share under the Company's Employee Benefit Plan
Registration Statement of February 25, 1998. ------------ ---------- --------------
Balance - January 31, 2000 95,101,777 $9,510 $ 4,896,694
============= ========== =============
</TABLE>
<PAGE>F-5
Treasury International, Inc.
Consolidated Statement of cash flows
YEAR Ended JANUARY 31, 2000
<TABLE>
<S> <C> <C>
January 31, 2000 January 31, 1999
----------------- ------------------
Cash flows from operating activities
Net income $ 229,111 $ 2,158,635
Adjustment to Retained Earnings (850,000) -
Adjustment to reconcile net income to net cash used in operating - -
activities
Proceeds on issue of common shares for services rendered - 78,227
Amortization 93,080 84,147
Decrease in Deferred Income Taxes - 52,957
(Increase) decrease in accounts receivable 187,469 241,341
Increase in amount due from Wexcap Group (3,000) -
Decrease in inventories - 345,783
Decrease in sundry assets 491 68,922
Increase in accounts payable 70,032 (913,381)
----------------- ------------------
Cash provided by (used for) operating activities (272,817) 1,528,035
----------------- ------------------
Cash flows from financing activities
Promissory note payments received 1,350,602 (4,000,000)
Notes payable 243,247 -
Long-term debt (1,240,602) (884,466)
Loan Payable 43,772 -
Proceeds on issue of common shares 442,296 1,595,080
----------------- ------------------
Cash provided by (used for) financing activities 839,315 (3,289,386)
----------------- ------------------
Cash flows from investing activities
Goodwill (396,809) 1,744,122
Research and development costs (233,540) -
Disposal (Purchase) of capital assets (12,652) 529,197
----------------- ------------------
Cash provided by (used for) investing activities (643,001) 2,273,319
----------------- ------------------
Decrease (Increase) in bank indebtedness (76,503) 511,968
Bank balance (indebtedness), beginning of year 19,956 (492,012)
----------------- ------------------
Bank balance (indebtedness), end of year ($56,547) $ 19,956
================= ==================
</TABLE>
<PAGE>F-6
TREASURY INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT JANUARY 31, 2000
1. Nature of business
Treasury International, Inc. is a holding company which through its wholly
owned subsidiary, Compelis Corporation, is involved in the development of
E-Commerce and Web-enabled databases.
2. Summary of significant accounting policies
a) Basis of consolidation
These consolidated financial statements include the accounts of the
company and the revenues and expenses of its wholly owned subsidiary,
Compelis Corporation, from March 1, 1999, the date of acquisition, to
January 31, 2000.
b) Goodwill
The goodwill arises on the purchase of common shares of Compelis
Corporation. Amortization is provided on a straight-line basis over a
twenty-year period.
c) Research and development costs
The research and development costs relate to the work done in
developing an e-commerce software package and an Internet point of
sale package, together with database development. Amortization is
provided on a straight-line basis over a three-year period.
d) Capital assets
Capital assets are recorded at cost less accumulated amortization.
Amortization is provided as follows:
Office equipment - 20% diminishing balance
Computer equipment - 30 % diminishing balance
Leasehold improvements - term of lease
e) Revenue Recognition
Revenue is recognized when customers are invoiced for products shipped
by the company.
f) Income per share
Income per share is calculated based on the weighted average number of
shares outstanding during the year.
g) General
These financial statements have been prepared in accordance with
United States generally accepted accounting principles (GAAP), as they
relate to these financial statements.
<PAGE>F-7
3. Promissory Note Receivable
The promissory note receivable arose on the sale of the company's
subsidiary, Mega Blow Moulding Limited on November 30, 1998.
Further to an Addendum to the Stock Purchase Agreement dated November 5,
1999, the company agreed to extend the due date of the note to May 31,
2000.
<TABLE>
<S> <C> <C> <C>
4. Goodwill
January 31, 2000 January 31, 1999
------------------------------------------------------------------- ---------------------
Accumulated Net book Net book
Cost Amortization value value
------------------- ------------------- --------------- ---------------------
$396,809 $14,880 $381,929 $ -
=================== =================== =============== =====================
5. Research & Development Costs
January 31, 2000 January 31, 1999
------------------------------------------------------------------ ---------------------
Accumulated Net book Net book
Cost Amortization value value
------------------ ------------------- --------------- ---------------------
$233,540 $73,538 $160,002 $ -
================== =================== =============== =====================
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
6. Capital assets
January 31, 2000 January 31, 1999
--------------------------------------------------- ---------------------
Accumulated Net book Net book
Cost Amortization value value
-------------- ----------------- ------------ ---------------------
Office equipment $21,715 $13,395 $8,320 $6,935
Computer equipment 21,319 14,836 6,483 -
Leasehold improvements 1,407 1,285 122 -
-------------- ----------------- ------------ ---------------------
$44,441 $29,516 $14,925 $6,935
============== ================= ============ =====================
</TABLE>
7. Notes payable
The notes payable consist of the following:
Due Date Principal Amount Interest Rate
-------------- ----------------- --------------
Current 197,344 12% - 15%
July 20, 2005 $ 45,903 12%
-----------------
Total 243,247
-----------------
8. Loan Payable
The loan payable bears interest at a rate of 12% per year and has no fixed
repayment terms.
<PAGE>F-8
9. Stock Options
a.) Options to purchase common shares have been issued under the Employee
Benefit Plan Registration Statement, registered February 25, 1998, to
officers and key employees of the company and its subsidiary. Options
outstanding at January 31, 2000 are as follows:
<TABLE>
<S> <C> <C> <C>
Year Granted Expiry Date Price Range No. of Shares
---------------------------- ------------------------- ------------------------- -------------------------
November 1, 1999 October 31, 2001 $ 0.11 808,900
November 1, 1999 October 31, 2002 $0.11 410,000
---------------------------- ------------------------- ------------------------- -------------------------
Total Outstanding 1,218,900
=========================
</TABLE>
b.) As at January 31, 2000, 773,600 outstanding warrants were exercised at
a price of $0.11 per share and 7,500 outstanding warrants were
exercised at a price of $0.16 per share, for each warrant owned.
10. Contributed surplus
Contributed surplus represents the premium paid on the issuance of common
shares.
11. Income taxes
As at January 31, 2000 the company had a net operating loss carryover of
approximately $2,193,000 expiring in various years through 2015.
12. Adjustment to selling price
The adjustment results from a change to the November 30, 1998 selling price
of the Company's subsidiary, Mega Blow Moulding Limited from $5,100,000 to
$4,250,000.
None
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation of our report dated April 20, 2000
relating to the financial statements for Treasury International, Inc., which
appear in the 1999 Annual Report on Form 10-K.
BROMBERG & ASSOCIATE
CHARTERED ACCOUNTANTS
TORONTO, CANADA
April 20, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS FOR THE PERIOD ENDED JANUARY 31, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> JAN-31-2000
<CASH> (54,547)
<SECURITIES> 0
<RECEIVABLES> 662,531
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 668,138
<PP&E> 44,441
<DEPRECIATION> (29,516)
<TOTAL-ASSETS> 3,874,392
<CURRENT-LIABILITIES> 407,730
<BONDS> 89,675
0
0
<COMMON> 9,510
<OTHER-SE> 4,896,694
<TOTAL-LIABILITY-AND-EQUITY> 3,874,392
<SALES> 363,272
<TOTAL-REVENUES> 999,086
<CGS> 233,295
<TOTAL-COSTS> 520,845
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,835
<INCOME-PRETAX> 229,111
<INCOME-TAX> 0
<INCOME-CONTINUING> 229,111
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 229,111
<EPS-BASIC> .002
<EPS-DILUTED> .002
</TABLE>
