U.S. Securities and Exchange Commission
Washington, D.C. 20549
AMENDMENT NO. 2 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
Hi, Tiger International, Inc.
(Name of Small Business Issuer in its charter)
Utah 87-0378021
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
350 West 300 South, Salt Lake City, Utah 84101
(Address of principal executive offices) (Zip Code)
1-801-322-1221
Issuer's telephone number,
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
None None
Securities to be registered under Section 12(g) of the Act:
Common Stock, $0.001 Par Value
(Title of class)
(Title of class)
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART I
Item 1. Description of Business.
(a) Business Development.
Hi, Tiger International, Inc. (the "Company"), was incorporated in the
State of Utah on October 27, 1981. The Company manufactured children's clothing
prior to the year ended September 30, 1986 after which the Company was dormant
through the period ended September 30, 1993. Subsequent to September 30, 1993,
the Board of Directors desiring to revive the company, decided the Company
should begin looking for business opportunities in which to invest. The
Company, thus, became a development stage company. The Company was in the
development stage through the year ended September 30, 1994 and from September
30, 1994 until the Company acquired The Friendly Net L.L.C. on February 14,
1995. (As described below) The company was formed for the purpose of acquiring
interests in various business opportunities, which in the opinion of management
will provide a profit to the Company. The reorganizations described below were
entered into for the purpose of consolidating various related entities into one
company and providing an operating entity to the company.
On October 27, 1981, Hi, Tiger International, Inc. acquired 100% of the
outstanding stock of Hi, Tiger, Inc., a newly formed company. The transaction
has been accounted for as a reorganization of ownership interests between
related parties as if it were a "Pooling of Interests." Accordingly, assets and
liabilities are reflected at their historical values. Shareholders; equity has
been restated to reflect shares exchanged in the reorganization as outstanding
since inception and income and expense have been presented since inception.
On February 14, 1995, Hi, Tiger, Inc. entered into an agreement whereby
260,000 shares of the Company's common stock, 75,000 stock options, and $21,000
cash was exchanged for an 80% interest in The Friendly Net, a Utah Limited
Liability Company, an Internet service company. The remaining 20% interest is
owned by Tree of Stars, Inc. The net assets of the Friendly Net, L.L.C., which
began operations on January 1, 1995, had a value of $106,675 which consisted of
computer equipment with a historical cost of $100,934 and furniture and fixtures
with a historical value of $5,741 on the date of the exchange. These
transactions have been accounted for as a purchase between related parties.
Accordingly, assets and liabilities are reflected at their historical values.
Shareholders' equity has been restated to reflect shares exchanged in the
reorganization as outstanding as of January 1, 1995 (inception of the Limited
Liability Company) and income and expense have been presented since the
inception of the Limited Liability Company.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary Hi, Tiger, Inc. and its majority owned (80%)
subsidiary The Friendly Net L.L.C. The effect of all intercompany balances and
transactions have been eliminated in combination.
Mr. Paul G. Begum is the President and controlling shareholder of the
Company and Hi, tiger, Inc, (its wholly owned subsidiary), and The Friendly Net
L.L.C., (its 80% owned subsidiary). Mr. Begum is also the President and
controlling shareholder of Tree of Stars, Inc. which is the 20% owner of The
Friendly Net L.L.C.
(b) Business of Issuer.
The Company provides internet access and marketing services to individuals
and companies and is a full Internet Service Provider (ISP) offering the
complete range of internet connectivity ranging from subscription dial-up
SLIP/PPP accounts through full T-1 (full T-3 available) and World Wide Web page
publishing. Currently, Internet access is provided through our Ethernet network
via TCP/IP protocol. The network is implemented utilizing multiple Unix Sparc
Servers running Solaris. Wide-area connectivity is provided via multiple T1
connections employing both PPP and Frame Relay implemented via Cisco routers,
CSU/DSU's and Fiber Optic Cabling. Access to the Internet is provided primarily
along the Wasatch Front area of Northern Utah the geographic region of northern
Utah that extends from Brigham City southward past Provo to the southern borders
of Utah County with the ability to provide service regionally. Individual
accounts are serviced through high speed dial-up modems connected to network
port servers. On-going telephony services are provided under individual
subscription agreements with local telephony vendors. The company is currently
able to provide dial-up service coverage within Utah from Ogden to Provo. With
the exception of one Unix Sparc server which is under a bargain purchase lease
through February 1997, the Company owns all the equipment necessary to provide
the services described.
Internet marketing services consist of creation of World Wide Web pages
coupled with consulting services that assist customers in developing a
successful Internet presence. Web page storage is also available to customers.
We use turn-key hardware and software required to establish WWW sites located at
the customer's location.
The service provided is marketed to individuals and business and is
delivered via common carrier telecommunications systems such as telephone lines.
No new product offerings announcements are planned at this time.
The Company encounters competition from a variety of firms offering
Internet services in its market area. Many of these firms have long standing
customer relationships and are well-staffed and financed. The Company believes
that competition in the Internet service industry is based on competitive
pricing and availability of technical support. The Company offers services at
very competitive prices and offers the highest level of technical support to its
customers. The Internet service provider market is an emerging market;
therefore, the future role of competition in the market place is unclear.
The advanced knowledge of the Internet that our staff has allows us to
provide the highest level of technical support for our customers. The six
employees of the Company have a vast range of specialties from modem to modem
connectivity to configuring routers for operation of dedicated Internet
connections. With over 25 years of direct Internet experience, our staff
maintains and consistently develops their Internet knowledge. This knowledge is
made available to our customers on a daily basis to assist in coordinating,
installing, and trouble shooting our customers' connections, whether it is a
dial-up or dedicated service they are subscribing to. The entirety of our staff
works well in a small company environment and has the desire and diligence to
give 100% of their efforts. This is compared to immediate competitors those
local Internet Service Providers that service the Wasatch Front area who provide
little or no direct technical support. The Friendly Net currently assigns over
half of its staff to technical support operations duties. We provide a wide
range of technical support services and options in order to meet our customers'
needs. The Friendly Net provides primary technical support by telephone,
electronic mail, online, and at the customer's site. When a customer contacts
the Friendly Net, the customer is assigned a trained technician who can respond
to the specific problems of the customer. Our competitors provide support
primarily via electronic mail; further, those that provide technical support by
telephone do not immediately place their customer though to a trained
technician; rather, a customer talks to a receptionist or sales person or are
required to leave a message for a technician.
Customers access the Internet by connecting to the Companies network,
which is part of the World Wide Internet. The product is data and thus
intangible without a clearly defined raw material.
"Hi, Tiger" and "The Friendly Net" are registered trademarks.
The companies products do not require governmental approval or support.
The Internet Service Provider market has grown out of and around the World Wide
Internet. The Internet was primarily funded and constructed by the United
States Government. Most of this funding has been withdrawn over the past few
years. The private sector, in the form of internet Service Providers, have
filled the void left by the withdrawal of the US Government.
The Company has six full time employees.
Glossary of Industry Terms:
Cisco A leading manufacturer of network routers which are used to
route data packets between wide-are networks.
CSU/DSU A high speed digital modem.
Fiber Optic A physical medium for communicated digital data utilizing
glass fiber instead of copper wire.
Frame Relay A wide-area networking protocol utilized to transfer data over
public telephone networks.
PPP Point to Point Protocol. Used to "fool" computers with modems
into behaving as if they had a direct, hardwired connection to
the internet, allowing the user to make use of programs that
access the Internet directly.
SLIP Serial Line Internet Protocol. Similar to PPP for making
Internet connections via modem, but a little less efficient
and not quite as tight as PPP.
TCP/IP Transmission Control Protocol/Internet Protocol. TCP/IP is
the common language of the Internet, and it is what allows
computers of all different type to use the Internet and
communicate with each other, regardless of platform or
operating software of the individual computers.
T1 A high speed digital data line moving with a nominal speed of
1.54 megabits per second.
T3 A high speed digital data line moving with a nominal speed of
45 megabits per second.
WWW World Wide Web or Web. This is the most rapidly growing part
of the Internet. It is a collection of sites that use the
"http" protocol and the "HTML language to create and serve
graphical, 'hyperlinked' documents. A hyperlink is an area of
a document, either text, a graphic image, or part of a graphic
image, that is linked to another document or resource and can
be accessed simply by clicking the mouse on that link. This
makes navigating and finding useful information much easier
and more user-friendly. The friendly Net's Web page is
located at http://www.utw.com.
Item 2. Management's Discussion and Analysis or Plan of Operation.
General
The following discusses the financial position and results of operations
of the Company and its consolidated subsidiary, The Friendly Net (a Utah Limited
Liability Company), which have been combined and accounted for as a purchase
between related parties.
Liquidity and Capital Resources
The Company requires working capital principally to fund its current
operations and accounts receivable. Generally the Company has adequate funds
for its activities, from time to time in the past the Company has relied on
short-term borrowings and the issuance of restricted common stock to fund
current operations. There are no formal commitments from banks or other lending
sources for lines of credit or similar short-term borrowings, but the Company
has been able to borrow any additional working capital that has been required.
From time to time in the past, required short-term borrowings have been obtained
from a principal shareholder or other related entities. It is anticipated that
the current operations will expand and the funds generated will exceed the
Company's working capital requirements for the foreseeable future and that it
will no longer seek loans from principal shareholders.
The increase in liquidity and capital resources during the past two years
reflects the increases attributable to the acquisition of The Friendly Net and
the partial year of operations. The Company generates and uses cash flows
through three activities: operating, investing, and financing. During the year
ended September 30, 1995, operating activities used cash of $19,000 as compared
to net cash used of $18,000 for 1994 and $10,000 for 1993. The increase in cash
used by operating activities in 1995 compared to 1994 and 1993 is due
principally to the commencement of operations in The Friendly Net while in
previous years the Company was in the development stage.
Cash flows used in investing activities changed in 1995 primarily due to
the acquisition of $16,000 of computer equipment for The Friendly Net Operations
and $21,000 for the acquisition of the Friendly Net LLC.
Financing activities provided $62,000 in 1995 used $11,000 in 1994 and
provided $50,000 in 1993. The increase in cash flow from financing activities
in 1995 and 1993 was primarily from the sale of restricted common stock while
the decrease in 1994 was primarily from the repayment of loans from related
parties. As of March 31, 1996, Klever-Kart, Inc. paid in full the $46,000 Note
owed to the Company which significantly increases liquidity.
Management believes that the Company's current cash and funds available
will be sufficient to meet capital requirements and short term and long term
working capital needs in the fiscal year ending September 30, 1996 and beyond,
unless a significant acquisition or expansion is undertaken. The Company is
constantly searching for potential acquisitions and/or expansion opportunities.
However, there are no arrangements or ongoing negotiations for any acquisition
or expansion.
Results of Operations
As of September 30, 1995, the Company's has only been in operations since
January 1995 (nine months). The revenues and gross margins for the fiscal year
ended September 30, 1995 are not necessarily indicative of the results that may
be expected for a full year. During the preceding year (fiscal 1995), customers
with repeat business accounted for a majority of the revenues generated.
Although the Company's subsidiary has performed work for it's customers with
repeat business, there is no assurance that such customers will maintain or
increase the level of volume of business of the Company. Since the acquisition
of The Friendly Net, general and administrative expenses have increased more
than the gross margin generated by the operations resulting in a loss from
operations of $128,000 for the year ended September 30, 1995 and $37,000 and
$15,000 for the six months ended March 31, 1996 and 1995, respectively, compared
to periods prior to the acquisition of The Friendly Net with losses from
operations of $22,000 and $10,000 for the years ended September 30, 1994 and
1993, respectively. During fiscal 1995 and the six months ended March 31, 1996
the increased general and administrative expenses was a result of increased
activity in the search for potential acquisition and the expenses resulting from
staffing and training personnel for the operations of The Friendly Net, while
the volume of revenues generated had not reached a point where the gross margin
generated was sufficient to offset the cost of the initial start-up expenses.
General and Administrative costs are expected to remain fairly stable; although
there may be some increases in technical support personnel costs as the customer
base grows.
Inflation and Regulation
The Company's operations have not been, and in the near term are not
expected to be, materially affected by inflation or changing prices. The Company
encounters competition from a variety of firms offering Internet services in its
market area. Many of these firms have long standing customer relationships and
are well-staffed and well financed. The Company believes that competition in the
Internet service industry is based on competitive pricing, although the ability,
reputation and technical support of a concern is also significant. The Company
does not believe that any recently enacted or presently pending proposed
legislation will have a material adverse effect on its results of operations.
Item 3. Description of Property.
The Company at this time has no properties. The Company occupies certain
sales offices under a noncancellable lease. The lease expires on June 30, 1996
and then converts to a month to month lease. It is expected that in the normal
course of business, leases that expire will be renewed or replaced by leases on
other properties. The current lease requires minimum rental payments of
$12,000.00 per year.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
(a) Security ownership of certain beneficial owners.
The following table sets forth the number and percentage of the Company's
common shares owned of record and beneficially by each person owning more than
5% of such common shares at September 30, 1995.
(1) (2) (3) (4)
Title of Class Name and Amount and Percent of Class
Address of Nature of
Beneficial Beneficial
Owner Owner
Common Tree of Stars Inc. 666,332 28.13%
(See Item 7.)
* Note: Mr. Paul G. Begum is the director and majority owner of Tree of
Stars, Inc.
The following table set forth the number and percentage as of the date of
this filing, the shares beneficially owned by all directors and nominees:
(1) (2) (3) (4)
Title of Class Name and Amount and Percent of Class
Address of Nature of
Beneficial Beneficial
Owner Owner
Common Paul G. Begum 846,499 * 35.38% *
* Note: Of the number of shares shown in column (3), 666,332 shares relate
to the shares owned by Tree of Stars, Inc. for which Mr. Begum is the director
and majority shareholder, and 100,000 shares relate to options granted to Mr.
Begum to purchase 100,000 shares of common stock at $.25 cents per share. The
option will expire March 22, 1998 and may be exercised at any time prior to
expiration. The percentage in column (4) is calculated on the basis of the
amount of outstanding securities owned by Mr. Begum and Tree of Stars, Inc.,
plus the options to purchase 100,000 shares as if the option had been exercised
as of September 30, 1995.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
Directors and Executive Officers.
(1) (2) (3)
NAME and AGE POSITION TERM OF OFFICE
Paul G. Begum, 57 President 1981 to Present
Kent Poole, 46 Director March 1995 to Present
Scott Hunt, 39 Director 1994 to Present
The number of directors of the Company shall be not more than nine (9) nor
less than three (3). Each director shall hold office until the next annual
meeting of stockholders and until his successor shall have been elected and
qualified.
Paul G. Begum is 57 years of age and for the past five years has been
President and Chief Executive Officer of Klever-Kart, Inc., and President of Hi,
Tiger International, Inc.
Kent Poole is 46 years of age and from 1991 to present has been the owner
of Mountain West Enterprises, Inc. a Multi-Line manufacturers representative
specializing in ergonomics and loss prevention.
Scott Hunt is age 39 and from 1992 to present has been involved with
marketing at Enviro-Guard Corporation. He is responsible for product design and
development of a sales program for over-the-counter insecticide markets, as well
as commercial sales programs. From 1986 - 1992, Mr. Hunt was co-owner of Western
Pacific Media & Marketing which was involved in marketing and production work
for a variety of clients for whom he purchased print ads and radio and
television spots both locally and nationally..
Item 6. Executive Compensation.
None.
Item 7. Certain Relationships and Related Transactions.
To provide necessary working capital, various shareholders have loaned the
Company money in the form of Notes. The notes are payable on demand plus
interest at 10% per annum. The notes are considered at arms length and the terms
are as favorable as could have been obtained from unaffiliated parties. The
balance due as of September 30, 1995 and 1994 plus accrued interest is as
follows:
1995 1994
PRINCIPAL INTEREST PRINCIPAL INTEREST
Paul G. Begum $ - $ 6,194 $ 5,173 $ 5,166
Tree of Stars, Inc.* $ 13,000 $ 13,730 $ 13,000 $ 11,197
Maktoob, Inc.* $ 13,900 $ 21,968 $ 13,900 $ 18,569
TOTAL $ 26,900 $ 41,892 $ 32,073 $ 34,932
The Company has loaned $46,000 to an Klever-Kart, Inc.* (an affiliated
company). The note is payable on demand plus interest at 10% per annum. The
balance due as of September 30, 1995 and 1994 is $46,000 plus accrued interest
of $9,310 and $4,162 respectively.
As of September 30, 1995 and 1994 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
The Friendly Net L.L.C.** has entered into a commercial lease of office
space with Tree of Stars P.D.O., Inc.* (an affiliated company). The lease
provides for rental payments of $1,000 per month and expires June 30, 1996.
* NOTE: Paul G. Begum is the director and majority owner of Hi, Tiger
International, Inc., Tree of Stars, Inc., Tree of Stars P.D.O., Inc., Maktoob,
Inc., and Klever-Kart, Inc.
** NOTE: The Friendly Net L.L.C. is a majority owned subsidiary of the
Company. (See Item 1)
Also, See Item 4 and Item 5 above.
Item 8. Description of Securities.
The corporation has authorized fifty million (50,000,000) shares of common
stock with a par value of $0.001 per share. All stock of the corporation shall
be of the same class, Common, and shall have the same rights and preferences.
Each share of stock is entitled to one vote. There are no preemptive rights.
No dividends have been declared. Fully-paid stock of this corporation shall not
be liable to any further call or assessment.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
The stock is traded over-the-counter on the Electronic Bulletin Board with
the trading symbol "HITI". The following high and low bid information was
provided by Olsen, Payne & Company. The quotations provided reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.
1994 HIGH BID LOW BID
First Quarter (12/31/93) (To the best knowledge of management, there
Second Quarter (03/30/94) was no trading of shares for the first three
Third Quarter (06/30/94) quarters of the 1994 fiscal year ended
September 30, 1994.
Fourth Quarter (09/30/94) $0.75 $0.625
1995 HIGH BID LOW BID
First Quarter (12/31/94) $ 0.75 $ 0.625
Second Quarter (03/30/95) $ 0.6875 $ 0.6875
Third Quarter (06/30/95) $ 0.6875 $ 0.5625
Fourth Quarter (09/30/95) $ 0.5 $ 0.5
The number of shareholders of record of the Company's common stock as of
September 30, 1995 was 182.
The Company has not paid any cash dividends to date and does not
anticipate paying dividends in the foreseeable future. It is the present
intention of management to utilize all available funds for the development of
the Company's business.
Item 2. Legal Proceedings.
None.
Item 3. Changes in and Disagreements with Accountants.
There are not and have not been any disagreements between the Company and
its accountants on any matter of accounting principles, practices or financial
statements disclosure.
Item 4. Recent Sales of Unregistered Securities.
The Company over the past three years has sold 760,800 shares of common
stock. The stock was not sold through an underwriter and was not sold through
a public offer. A summary of the transactions follows:
Common Stock
Shares Amount
October 6, 1993 shares issued
to P. Olsen for cash
at $.15 per share 400,800 $ 60,000
August 30, 1994 shares issued
to a company Murco Investments
Limited Partnership for cash
at $.50 per share 15,000 7,500
October 7, 1994 shares issued
to D. Paris for cash
at $.50 per share 30,000 15,000
January 1, 1995 shares issued
to a related corporation
Tree of Stars, Inc. and
individuals T. Begum, R. Roll,
J.J. Harrison in exchange for
ownership units of a Limited
Liability Company at $.247
per share (includes options
to purchase 75,000 shares
at $.75 per share) 260,000 $ 64,340
April 25, 1995 shares issued
to P. Olsen for cash
at $.50 per share subject to
a Repurchase Agreement 100,000 50,000
June 28, 1995 Exercise
of Repurchase Agreement
dated April 25, 1995
by P. Olsen at $.75 per share (100,000) (75,000)
Common Stock
Shares Amount
May 31, 1995 shares issued
to a company The Arbinger
Company for cash at
$.40 per share 50,000 20,000
July 28, 1995 shares issued
to L. Burningham in
exchange for services
at $.377 per share 5,000 1,885
March 25, 1996 shares issued
to P. Olsen for cash at
$.50 per share 25,000 12,500
March 28, 1996 shares issued
to C. Poulton for cash at
$.75 per share 16,000 12,000
801,800 $ 168,225
These sales are exempt under Regulation D Rule 506 of the Securities Act
of 1933.
Item 5. Indemnification of Directors and Officers.
Not applicable
Part F/S
The following documents are filed as part of this report.
Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . 15
Consolidated Balance Sheet, March 31, 1996 and
September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . 16
Consolidated Statements of Operations,
For the Six Months Ended March 31, 1996 and 1995 and
For the Years Ended September 30, 1995, 1994, and 1993. . . . . . . . . 18
Consolidated Statements of Changes in Stockholders' Equity,
For the Six Months Ended March 31, 1996 and 1995 and
For the Years Ended September 30, 1995, 1994, and 1993. . . . . . . . . 19
Consolidated Statements of Cash Flows,
For the Six Months Ended March 31, 1996 and 1995 and
For the Years Ended September 30, 1995, 1994 and 1993 . . . . . . . . . 22
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . 25
Schedule I, Condensed Financial Information
of Registrant (All Required Information
Reported in Consolidated Financial Statements
and Notes to the Consolidated Financial Statements). . . . . . . . . .
Schedule II, Valuation of Qualifying Accounts
(All Required Information Reported in Consolidated
Financial Statements and Notes to the
Consolidated Financial Statements) . . . . . . . . . . . . . . . . . .
Schedule III, Real Estate and Accumulated Depreciation
(Not Applicable) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule IV, Mortgage Loans on Real Estate
(Not Applicable) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule V, Supplemental Information Concerning
Property-Casualty Insurance Operations
(Not Applicable) . . . . . . . . . . . . . . . . . . . . . . . . . . .
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Hi, Tiger International, Inc.
Salt Lake City, Utah
Gentlemen:
We have audited the accompanying consolidated balance sheets of Hi, Tiger
International, Inc. and Subsidiaries, as of September 30, 1995 and 1994, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Hi, Tiger
International, Inc. and Subsidiaries, as of September 30, 1995 and 1994, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
November 3, 1995
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
MARCH 31, SEPTEMBER 30,
ASSETS 1996 1995 1995 1994
Current Assets
Cash $ 7,158 $ 5,398 $ 17,267 $ 11,210
Note Receivable - Related Party - 46,000 46,000 46,000
Interest Receivable - 5,672 9,310 4,162
Accounts Receivable (Net of
Allowance for Doubtful Accounts
of $2,739) 20,493 1,500 19,336 -
Total Current Assets 27,651 58,570 91,913 61,372
Fixed Assets
Equipment 129,594 101,156 115,642 -
Equipment Lease 10,730 - 10,730 -
Furniture & Fixtures 6,866 5,741 6,866 -
Less Accumulated Depreciation (55,004) (8,537) (30,237) -
Net Fixed Assets 92,186 98,360 103,001 -
Total Assets $ 119,837 $ 156,930 $ 194,914 $ 61,372
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable, Trade $ 56,949 $ 5,011 $ 44,980 $ 4,085
Interest Payable - 38,247 41,892 34,932
Accrued Liabilities 6,030 21 8,494 -
Lease Obligation - Current Portion 5,530 - 4,620 -
Notes Payable - Related Party - 34,573 26,900 32,073
Other Payable - Related Party
(Note 6) 75,000 - 75,000 -
Total Current Liabilities 143,509 77,852 201,886 71,090
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Continued)
(Unaudited)
MARCH 31, SEPTEMBER 30,
1996 1995 1995 1994
Long Term Liabilities
Lease Obligation
- Long Term Portion $ - $ - $ 2,884 $ -
Total Long Term Liabilities - - 2,884 -
Total Liabilities 143,509 77,852 204,770 71,090
Minority Interest 14,420 19,399 16,184 -
Stockholders' Equity
Common Stock (Par Value $.001),
50,000,000 shares authorized.
2,317,300, 2,237,300, 2,292,300
and 1,947,300 shares issued and
outstanding March 31, 1996 and
1995 and September 30, 1995
and September 30, 1994,
respectively 2,317 2,237 2,292 1,947
Common Stock to be Issued 16 50 - 30
Paid in Capital in Excess of Par
Value 434,729 383,703 410,270 299,673
Retained Deficit (475,154) (326,311) (438,602) (311,368)
Total Stockholders' Equity (38,092) 59,679 (26,040) (9,718)
Total Liabilities and
Stockholders' Equity $ 119,837 $ 156,930 $ 194,914 $ 61,372
The accompanying notes are an integral part of these financial statements.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Six Months Ended For the Year Ended
March 31, September 30,
1996 1995 1995 1994 1993
REVENUES
Sales $ 132,541 $ 18,840 $ 157,136 $ - $ -
Cost of Sales 32,878 3,513 29,280 - -
Gross Margin 99,663 15,327 127,856 - -
EXPENSES
General and
Administrative 134,519 29,986 253,355 21,675 9,767
Bad Debt Expense 1,786 415 2,739 - -
Total Operating
Expenses 136,305 30,401 256,094 21,675 9,767
Income (Loss) From
Operations (36,642) (15,074) (128,238) (21,675) (9,767)
Other Income (Expense)
Interest Income 1,196 1,511 5,148 5,081 80
Misc. Income 867 - 128 - -
Interest Expense (3,737) (3,316) (9,223) (6,317) (5,618)
Net Other Income
(Loss) (1,674) (1,805) (3,947) (1,236) (5,538)
Income (Loss)
Before Taxes (38,316) (16,879) (132,185) (22,911) (15,305)
Income Taxes - - (200) (200) (290)
Minority Income 1,764 1,936 5,151 - -
Net Income (Loss) $ (36,552)$ (14,943)$ (127,234)$ (23,111)$ (15,595)
Weighted Average Shares
Outstanding 2,293,614 2,104,882 2,163,172 1,933,550 1,531,500
Loss Per Share $ (.02)$ (.01)$ (.06)$ (.01)$ (.01)
The accompanying notes are an integral part of these financial statements.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Common Stock Capital in
Common Stock to be Issued Excess of Earnings
Shares Amount Shares Amount Par Value (Deficit)
Balance
September 30, 1992 1,531,500 $ 1,531 - $ - $ 217,619 $ (272,662)
Common Stock to be Issued
(Fully paid at 9/30/93
issued 10/6/93) - - 400,800 401 59,599 -
Net Loss - - - - (15,595)
Balance
September 30, 1993 1,531,500 1,531 400,800 401 277,218 (288,257)
October 6, 1993
shares issued to an
individual for cash
at $.15 per share 400,800 401 (400,800) (401) - -
August 30, 1994
shares issued to a
company for cash
at $.50 per share 15,000 15 - - 7,485 -
Common Stock to be Issued
(Fully paid at 9/30/94
issued 10/7/94) - - 30,000 30 14,970 -
Net Loss - - - - - (23,111)
Balance
September 30, 1994 1,947,300 1,947 30,000 30 299,673 (311,368)
October 7, 1994
shares issued to an
individual for cash
at $.50 per share 30,000 30 (30,000) (30) - -
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Continued)
Common Stock Capital in
Common Stock to be Issued Excess of Earnings
Shares Amount Shares Amount Par Value (Deficit)
January 1, 1995
shares issued to a
related corporation
and individuals in
exchange for ownership
units of a Limited
Liability Company at
$.247 per share
(includes options
to purchase 75,000
shares at $.75 per share
(see NOTE 1 - Purchase
of Subsidiary) 260,000 $ 260 - $ - $ 64,080 $ -
April 25, 1995
shares issued to an
individual for cash
at $.50 per share
subject to a
Repurchase Agreement
(See NOTE 6) 100,000 100 - - 49,900 -
Exercise of Repurchase
Agreement (100,000) (100) - - (74,900) -
May 31, 1995
shares issued to a
company for cash
at $.40 per share 50,000 50 - - 19,950 -
July 28, 1995
shares issued to an
individual in exchange
for services at $.377
per share 5,000 5 - - 1,880 -
Compensation Expense on
Stock Options
(See NOTE 5) - - - - 49,687
Net Loss - - - - - (127,234)
Balance
September 30, 1995 2,292,300 2,292 - - 410,270 (438,602)
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Continued)
Common Stock Capital in
Common Stock to be Issued Excess of Earnings
Shares Amount Shares Amount Par Value (Deficit)
March 25, 1996
exercise of Stock Options
at $.50 per share 20,000 $ 20 - $ - $ 9,980 -
March 25, 1996
shares issued to an
individual at
$.50 per share 5,000 5 - - 2,495 -
March 28, 1996
shares issued to an
individual at
$.75 per share - - 16,000 16 11,984 -
Net Loss - - - - - (36,552)
Balance March 31, 1996
(Unaudited) 2,317,300 $ 2,317 16,000 $ 16 $ 434,729 $ (475,155)
The accompanying notes are an integral part of these financial statements.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended For the Year Ended
March 31, September 30,
1996 1995 1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (36,552)$ (14,943)$ (127,234)$ (23,111)$ (15,595)
Adjustments Used to Reconcile
Net Loss to Net Cash
Minority Income (1,764) (1,936) (5,151) - -
Provided by (Used In)
Operating Activities:
Compensation Expense from
Stock Options - - 49,687 - -
(Increase) Decrease in
Accounts Receivable (1,157) (1,500) (19,336) - -
(Increase) Decrease in
Interest Receivable 9,309 (1,511) (5,148) (4,082) (80)
Increase (Decrease) in
Payables 9,505 948 51,274 2,681 326
Increase (Decrease) in
Interest Payable (41,892) 3,315 6,960 6,317 5,618
Depreciation and
Amortization 24,767 8,537 30,237 - -
Net Adjustments (1,232) 7,853 108,523 4,916 5,864
Net Cash Used In Operating
Activities (37,784) (7,090) (18,711) (18,195) (9,731)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Equipment (13,952) (1,222) (15,833) - -
Acquisition of
Subsidiary - - (21,000) - -
Net Cash Used by
Investing Activities (13,952) (1,222) (36,833) - -
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
(Unaudited)
Six Months Ended For the Year Ended
March 31, September 30,
1995 1994 1995 1994 1993
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds From
Capital Stock Issued $ 24,500 $ - $ 70,000 $ 22,500 $ 60,000
Proceeds From Loans 46,000 - - - -
Proceeds From Borrowings
on Notes Payable - 2,500 - 400 2,200
Cash Loans Made - - - (34,000) (12,000)
Cash Payments on
Notes Payable (26,900) - (5,173) - -
Cash Payments on
Capital Lease (1,973) - (3,226) - -
Net Cash Provided by
Financing Activities 41,627 2,500 61,601 (11,100) 50,200
Net Increase (Decrease)
in Cash and
Cash Equivalents (10,109) (5,812) 6,057 (29,295) 40,469
Cash and Cash Equivalents at
Beginning of the Year 17,267 11,210 11,210 40,505 36
Cash and Cash Equivalents at
End of the Year $ 7,158 $ 5,398 $ 17,267 $ 11,210 $ 40,505
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest $ 45,077 $ - $ 2,263 $ - $ -
Income Taxes $ 200 $ 200 $ 200 $ 200 $ 200
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
On February 14, 1995 the Company issued 260,000 shares of stock in exchange for
an 80% ownership interest in a limited liability company.
During March 1995 the Company issued stock options to various employees and
directors for which compensation expense of $49,687.
On June 28, 1995, a shareholder exercised an option to put 100,000 shares of
stock back to the Company at $.75 per share. As of September 30, 1995, the
Company has not paid any amount of money toward the repurchase of these shares.
(See note 6)
On July 28, 1995 the Company issued 5,000 share of stock in exchange for
services.
The accompanying notes are an integral part of these financial statements.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(References to March 31, 1996 and 1995 are Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Hi, Tiger International, Inc. is
presented to assist in understanding the Company's financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
The unaudited financial statements as of March 31, 1996 and 1995 and for
the six months then ended reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to fairly state the
financial position and results of operations for the six months. Operating
results for interim periods are not necessarily indicative of the results which
can be expected for full years.
Organization and Basis of Presentation
The Company was organized under the laws of the State of Utah on October
27, 1981. The company was in the development stage as of September 30, 1994.
The Company commenced operations on January 1, 1995 of this year and is
considered an operating company as of September 30, 1995.
Nature of Business
The Company was formed for the purpose of acquiring interests in various
business opportunities, which in the opinion of management will provide a profit
to the Company.
Purchase of Subsidiary
On February 14, 1995, Hi, Tiger, Inc. entered into an agreement whereby
260,000 shares of the Company's common stock, 75,000 stock options at an
exercise price of $.75 any time through December 31, 1996, and $21,000 cash was
exchanged for an 80% interest in The Friendly Net, a Utah Limited Liability
Company. The Friendly Net, L.L.C.,which began operations on January 1, 1995,
had total assets with a historical cost value of $106,675, consisting of
computer equipment with historical value of $100,934 and office furniture and
fixtures with historical value of$5,741, and no liabilities on the date of the
exchange. These transactions have been accounted for as a purchase using the
recorded value of the net assets of the seller due to the related party
relationship.
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(References to December 31, 1995 and 1994 are Unaudited)
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
Purchase of Subsidiary (Continued)
Accordingly, assets and liabilities are reflected at their historical values.
Shareholders' equity has been restated to reflect shares exchanged in the
reorganization as outstanding as of January 1, 1995, and income and expenses
have been presented since January 1, 1995.
Consolidation
The consolidated financial statements include the accounts of the Company
and Hi, Tiger, Inc. its wholly owned subsidiary and The Friendly Net L.L.C. its
majority-owned (80%) subsidiary. The effect of all intercompany balances and
transactions have been eliminated in combination.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all highly
liquid debt instruments purchased with maturity of three months or less to be
cash equivalents to the extent the funds are not being held for investment
purposes.
Loss per Common Share
Loss per common share are based upon the weighted average number of common
shares outstanding during each year. Fully diluted earnings per share are not
presented because they are anti-dilutive.
Fixed Assets
Fixed assets are stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated economic useful lives
of the related assets as follows:
Computer equipment3 years
Office furniture and fixtures5-10 years
Upon sale or other disposition of property and equipment, the cost and
related accumulated depreciation or amortization are
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(References to December 31, 1995 and 1994 are Unaudited)
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
Fixed Assets (Continued)
removed from the accounts and any gain or loss is included in the determination
of income or loss.
Expenditures for maintenance and repairs are charged to expense as
incurred. Major overhauls and betterments are capitalized and depreciated over
their estimated economic useful lives.
Capital Lease
The Company is the lessee of computer equipment under a capital lease
expiring in 1997. The assets and liabilities under capital lease are recorded
at the lower of the present value of the minimum lease payments or the fair
value of the asset. The assets are amortized over the lower of the lease term
or their estimated productive lives. Amortization of assets under capital lease
is included in depreciation expense for September 30, 1995.
NOTE 2 - INCOME TAXES
The Company has accumulated tax losses estimated at $381,000 expiring in
years beginning 1998. Current tax laws limit the amount of loss available to be
offset against future taxable income when a substantial change in ownership
occurs. The amount of net operating loss carryforward available to offset
future taxable income will be limited if there is a substantial change in
ownership.
NOTE 3 - RELATED PARTY TRANSACTIONS
Various shareholders have loaned the Company $5,173, $13,000 and $13,900
respectively. The notes are payable on demand plus interest at 10% per annum.
The balance due as of September 30, 1995 and 1994 is $26,900 and $32,073 plus
accrued interest of $41,892 and $34,932 respectively. These balances have been
fully paid as of March 31, 1996.
The Company has loaned $46,000 to an affiliated company. The note is
payable on demand plus interest at 10% per annum. The
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(References to December 31, 1995 and 1994 are Unaudited)
(Continued)
NOTE 3 - RELATED PARTY TRANSACTIONS (Continued)
balance due as of September 30, 1995 and 1994 is $46,000 plus accrued interest
of $9,310 and $4,162 respectively. The balance has been paid in full as of
March 31, 1996.
The Friendly Net L.L.C. has entered into a lease agreement with an
affiliated company in the amount of $1,000 per month. (See Note 4)
NOTE 4 - COMMITMENTS
As of March 31, 1996 and September 30, 1995 and 1994 all activities of the
Company have been conducted by corporate officers from either their homes or
business offices. Currently, there are no outstanding debts owed by the company
for the use of these facilities and there are no commitments for future use of
the facilities.
The Friendly Net L.L.C. has entered into a commercial lease of office space
with Tree of Stars, Inc./P.D.O. (an affiliated company). The lease provides for
rental payments of $1,000 per month and expires June 30, 1996.
NOTE 5 - STOCK OPTIONS
On March 22, 1995 the Company adopted stock option plans for specified
directors and employees pursuant to which 45,000 stock options at $.75 per share
were awarded to employees and 105,000 stock options at $.25 per share were
awarded to specified directors, and 5,000 stock options at $.75 were awarded to
a director. The outstanding and exercisable options expire on periods of
between two and three years from the dates of grant, which is during the period
September, 1997 through September, 1998.
Compensation expense charged to operations in 1995 was $49,687. The following
is a summary of transactions:
HI, TIGER INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995 AND 1994
(References to December 31, 1995 and 1994 are Unaudited)
(Continued)
NOTE 5 - STOCK OPTIONS (Continued)
Shares Under Option
March 31, September 30,
1996 1995 1994
Outstanding, beginning of year 250,000 - -
Granted during the year - 250,000 -
Cancelled during the year - - -
Exercised during the year 20,000 - -
Outstanding, end of year
(at prices ranging from $.25
to $.75 per share) 230,000 250,000 -
Eligible, end of year for
exercise currently (at prices
ranging from $.25 to $.75
per share) 230,000 250,000 -
NOTE 6 - STOCK REPURCHASE AGREEMENT
On March 27, 1995 the Company entered into an agreement whereby at the
option of the shareholder the Company is to purchase 100,000 shares of its own
stock from Peter D. Olsen (shareholder) at $.75 per share. The terms of the
agreement provide that the option was to be exercised by June 30, 1995 with
payment in full by July 31, 1995. The agreement also provided the shareholder
an option to buy 20,000 shares at $.50 per share by March 31, 1996. On June 28,
1995 the shareholder sent a letter to the Company exercising the election to put
the 100,000 shares back to the Company. As of December 31, 1995, the Company has
not paid any money toward the repurchase of the 100,000 shares. On March 25,
1996 the shareholder exercised his option to purchase 20,000 shares at $.50 per
share.
PART III
Item 1. Index to Exhibits.
Item 2. Description of Exhibits.
EXHIBIT INDEX
PAGE
Exhibit 2 - Articles of Incorporation and By-Laws:
Hi, Tiger International, Inc.
(Formerly Badger Energy, Inc.)
Filed with Form 10-SB on
December 29, 1995. . . . . . . . . . . . . . . .Incorporated
by reference
The Friendly Net, L.L.C
Filed with Form 10-SB on
December 29, 1995. . . . . . . . . . . . . . . .Incorporated
by reference
Hi, Tiger International, Inc
Filed with Form 10-SB on
December 29, 1995. . . . . . . . . . . . . . . .Incorporated
by reference
Hi, Tiger, Inc
Filed with Form 10-SB on
December 29, 1995. . . . . . . . . . . . . . . .Incorporated
by reference
Exhibit 11 - Computation of Per Share Earnings:
(Refer to Independent Auditors Report Page "Note 1")
Exhibit 12 - Additional Exhibits:
Minutes of Directors Meeting
Filed with Form 10-SB on
December 29, 1995... . . . . . . . . . . . . . .Incorporated
by reference
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Hi, Tiger International, Inc.
DATE: May 23, 1995
By /s/
Paul G. Begum, President
(Principal Financial and
Accounting Officer)
