SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: June 30, 2000
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number: 333-43497
CUIDAO HOLDING CORP.
--------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0639616
------------------------------------------ --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2951 SIMMS STREET
HOLLYWOOD, FL 33020-1510
------------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (954) 924-0047
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
----------------------------------- ---------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
--------------------------------------------------------
(Title of class)
Copies of Communications Sent to:
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696 - Fax: (561) 659-5371
<PAGE>
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes No
---- ----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: At June 30, 2000, the registrant had
outstanding 3,158,374 shares of common stock, par value $0.0001, which is the
registrant's only class of common stock.
Part I. FINANCIAL INFORMATION
INDEX TO FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets.......................................F-1
Condensed Consolidated Statements of Operations
for the Six Months Ended June 30, 2000. . . .............................. F-2
Condensed Consolidated Statements of Operations
for the Three Months Ended June 30, 2000.................................. F-3
Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2000..................................... F-4
Notes to Condensed Consolidated Financial Statements....................... F-5
<PAGE>
<TABLE>
<CAPTION>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS JUNE 30, DECEMBER 31,
2000 1999
(UNAUDITED) (AUDITED)
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 1,284 $ 1,533
Accounts Receivable 23,312 27,422
Inventory 167,913 304,346
----------------- ------------------
Total Current Assets 192,509 333,301
----------------- ------------------
Property, Plant and Equipment (Net of $31,289 and $22,113
accumulated depreciation at June 30, 2000 and
December 31, 1999) 581,735 584,873
----------------- ------------------
Other Assets:
Goodwill (Net of $15,000 and $13,333 accumulated
amortization at June 30, 2000 and December 31, 1999) - 1,667
Organizational Costs (Net of $1,202 and $1,048 accumulated
amortization at June 30, 2000 and December 31, 1999) 338 492
Deferred Loan Costs (Net of $5,250 and $3,500 accumulated
amortization at June 30, 2000 and December 31, 1999) 5,250 7,000
Deposits and Escrow Balances 5,326 19,314
------------------- -------------------
Total Other Assets 10,914 28,473
------------------ -------------------
Total Assets $ 785,158 $ 946,647
================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $334,692 $417,616
Security Deposits - 5,724
Notes Payable - Current Portion 49,909 48,324
------------------ -------------------
Total Current Liabilities 384,601 471,664
Long Term Liabilities:
Notes Payable 594,245 480,000
----------------- ------------------
Total Liabilities 978,846 951,664
----------------- ------------------
Stockholders' Equity:
Common Stock, $.0001 Par Value; 100,000,000
Shares Authorized; 3,158,374 and 2,402,175 Issued and
Outstanding at June 30, 2000 and December 31, 1999 316 240
Common Stock Held in Escrow (23)
Additional Paid In Capital 768,760 768,812
Accumulated Deficit (962,741) (774,069)
---------------- -------------------
Total Stockholders' Equity (193,688) (5,017)
---------------- ---------------------
Total Liabilities and Stockholders' Equity $ 785,158 $ 946,647
================== ====================
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-1
<PAGE>
<TABLE>
<CAPTION>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
2000 1999
---- ----
<S> <C> <C>
Revenues $ 148,362 $ 56,247
Cost of Goods Sold 68,670 46,123
---------------- ----------------
Gross Profit 79,692 10,124
Operating Expenses:
General and Administrative 225,969 168,962
--------------- ----------------
Income (Loss) Before Interest Income (Expense) (146,277) (158,838)
Interest Income (Expense) 42,395 413
---------------- ---------------
Net Income (Loss) $ (188,672) $ (159,251)
============= ===============
Loss Per Common Share $ (0.0708) $ (0.0680)
============== ================
Weighted Average Common Shares Outstanding 2,664,675 2,356,175
============== ===============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30,
(UNAUDITED)
2000 1999
---- ----
<S> <C> <C>
Revenues $ 54,485 $ 31,564
Cost of Goods Sold 20,522 26,203
---------------- -----------------
Gross Profit 33,963 5,361
Operating Expenses:
General and Administrative 123,274 66,987
--------------- -----------------
Income (Loss) Before Interest Income (Expense) (89,311) (61,626)
Interest Income - -
Interest (Expense) (24,011) (36)
--------------- --------------------
Total Interest Income (Expense) (24,011) (36)
--------------- --------------------
Net Income (Loss) $ (113,322) $ (61,662)
=================== ======================
Loss Per Common Share $ (0.0472) $ (0.0262)
=================== ======================
Weighted Average Common Shares Outstanding 2,402,175 2,356,175
=================== ======================
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
CUIDAO HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,
(UNAUDITED)
2000 1999
---- ----
<S> <C> <C>
Cash Flow from Operating Activities:
Net (Loss) $ (188,672) $ (159,251)
Adjustments to Reconcile Net Loss to Net Cash Used For
Operating Activities:
Depreciation and Amortization 12,747 8,843
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 4,110 2,319
(Increase) Decrease in Inventory 136,433 (36,597)
(Increase) Decrease in Prepayments and Deposits 13,988 15,154
Increase (Decrease) in Accounts Payable and Accrued Expenses (82,923) (2,504)
Increase (Decrease) in Security Deposits (5,724) -
---------------- ---------------------
Net Cash Used in Operating Activities (110,041) (172,036)
-------------- ----------------
Cash Flow from Investing Activities:
Acquisition of Equipment and Building (6,038) (595,311)
---------------- ----------------
Cash Flow from Financing Activities:
Increase in Loans Payable 115,830 7,430
Increase in Mortgage Payable - 480,000
------------------ ----------------
Net Cash Used in Financing Activities 115,830 487,430
--------------- ----------------
Net increase (decrease) in Cash (249) (279,917)
Cash - Beginning 1,533 353,281
Cash - Ending $ 1,284 $ 73,364
================== ======================
</TABLE>
The accompanying notes are an integral
part of these financial statements.
F-4
<PAGE>
CUIDAO HOLDING CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
GENERAL
Basis of Presentation - The unaudited condensed consolidated financial
statements include the accounts of the Company and its subsidiary. Intercompany
balances have been eliminated in consolidation.
Interim Financial Information - The financial information contained herein is
unaudited but includes all normal and recurring adjustments which, in the
opinion of management, are necessary to present fairly the information set
forth. The unaudited condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements, which are included in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1999.The Company's results for interim periods are not necessarily indicative of
results to be expected for the fiscal year of the Company ending December 31,
2000. The Company believes that this Quarterly Report filed on Form 10-QSB is
representative of its financial position, its results of operations and its cash
flows for the periods ended June 30, 2000 and 1999 covered thereby.
Comprehensive Income - In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 130 ("SFAS 130"),
"Reporting Comprehensive Income." SFAS 130 requires companies to disclose
comprehensive income and its components. The Company currently has no items of
other comprehensive income and therefore SFAS 130 does not apply.
LEGAL PROCEEDINGS
As of June 30, 2000, the Company was in default under the terms of its Second
Mortgage Promissory Note. In addition the monthly payments due February through
June 2000 are in arrears. A lease with a national credit tenant for fifty
percent of the Company's building was executed on June 13, 2000. This lease
begins on July 1, 2000 and terminates on June 30, 2002. The Lessee, The Goodyear
Tire & Rubber Company, will be paying a monthly rent of $2,500. It is the
Company's goal to refinance its Second Mortgage Promissory Note to reduce the
overall debt of the Company by paying down the amount being financed and also
secure said loan at a more competitive interest rate. In the event that
refinancing is not immediately accomplished, bridge financing has been arranged
to bring payments current.
The Company has filed a lawsuit against Investors Conceptual, Inc. This action
is for non-payment of funds owned to the Company and default by Investors
Conceptual, Inc. Settlement negotiations are presently ongoing in the above
cause of action.
The Company received a judgement against it due to non-payment of an obligation
to a vendor. The Company's legal council feels there is a good chance that the
judgement will be adjusted favorably on appeal. The Company also is
investigating whether the vendor will accept a settlement offer although the
Company has proceeded to file an appeal of the prior judgment.
F-5
<PAGE>
Item 2. Management's Discussion and Analysis
General
The Company's current portfolio of beers consists of the following
line produced in the People's Republic of China by Tsingtao Brewery No. 3, a
brewery owned and operated by Tsingtao Brewery Co., Ltd.:Red Dragon Draft, Red
Dragon Light and Red Dragon Amber. The Company's initial marketing strategy for
this line of Chinese beer is to introduce its Red Dragon product line to
Asian-theme restaurants (primarily Chinese restaurants). In its presentation,
the Company will stress the fact that its line of Chinese beer products will
provide the restaurateur with a product that he or she currently does not have,
that is, diversified light, extreme, amber and draft Chinese beer line.
The Company currently has a variety of wine products for
distribution. With its wine products, the Company's objective is to introduce
its imported wines into the United States retail market. The Company's marketing
and sales strategy with respect to its wine products will be to provide the
off-premise merchandise market with quality products at a reasonable cost to the
retailer and the consumer.
The company currently had a variety of alcoholic products for
distribution. During the balance of 2000, the Company plans to expand the number
of alcoholic beverage products under its management, as well as to increase the
number of distribution channels for its products. This expansion may be
accomplished by the acquisition of other importers and/or distributors of
alcoholic beverage products.
During the balance of fiscal 2000, the Company intends on continuing
its four basic principal objectives:
(1) aggressively manage and market its current portfolio of beers, wines and
spirits in specific niche markets of the overall alcoholic beverage industry;
(2) expand its management and administrative personnel to support its alcoholic
beverage product lines; and
(3) expand its product line and distribution channels through strategic
alliances and/or through acquisitions of other importers and distributors of
alcoholic beverage products or through the acquisition of producers of alcoholic
beverage products.
(4) develop additional brands (and labels) of wines which are exclusively owned
by Cuidao. Several brands are currently entering the trademark stage and
contracts are being finalized to supply the Company with a California varietal
wine portfolio.
Corporate Developments
On April 5, 2000 the Company executed a loan agreement with Infinity
Financial Group, Inc. (the "Loan Agreement"). Under the Loan Agreement, IFG
agreed to make loans to the Company of up to $1,825,000 in installments for a
period commencing with the date of the agreement and ending on April 4, 2004
(the "IFG Loan Commitment"). Under the terms of the IFG Loan Commitment, each
installment is supported by a convertible note and security agreement and the
Lender is granted warrants to purchase shares of the Company's Common Stock. The
notes bear interest at 8% per
<PAGE>
annum, run for a term of two years and are convertible at the fixed rate of $.75
per share. The warrants are exercisable for two years at a price of $1.50 per
share. Under the agreement, 20,027 shares are held by IFG in escrow for the
potential conversion of the initial note, interest for the term and exercise of
the initial warrant. Under the terms of the IFG Loan Agreement, an initial loan
of $11,000 was made on April 5, 2000. Further instalments and shares placed in
escrow were made to the Company; to wit, a loan of $28,245 on April 26, 2000
with 51,425 shares placed in escrow; $20,000 on June 7, 2000 with 36,413 shares
placed in escrow; $35,000 on June 15, 2000 with 63,722 shares placed in escrow;
$35,000 on June 28, 2000 with 63,722 shares placed in escrow; and $20,000 on
July 6, 2000 with 36,413 shares placed in escrow. Under the Loan Agreement, the
Company granted IFG registration rights and is obligated to file a registration
statement within one hundred and eighty days (180) days of the agreement. The
Company is preparing a registration statement on Form SB-2 for filing covering
3,322,667 shares of its Common Stock which number of shares will cover all notes
if issued and interest at the rate of 8% per annum for two (2) years at a fixed
conversion price of $0.75 per share and 500,000 warrants exercisable at $1.50.
The issuance of the securities was made pursuant to Regulation D, Rule 506 of
the Act.
Under the terms of the Registration Rights Agreement, Cuidao is to
pay all of the registration expenses incurred in connection with the
registration of the shares and the reasonable fees and expenses of one (1)
counsel for the Selling Shareholders, except that IFG is to pay all selling
commissions, underwriting discounts and disbursements, transfer taxes and fees
and expenses of separate counsel applicable to their sale of Cuidao's Common
Stock to be issued pursuant to the agreements underlying the IFG Loan
Commitment. The agreements provides that Cuidao must keep current and effective
the registration statement covering these shares for the greater of (i) a period
of at least four (4) years from the closing date and (ii) a period of at least
ninety (90) days after all of the notes have been converted or paid and all the
warrants have been exercised or have expired.
Effective July 1, 2000, the Company entered into a lease to the
portion of its new facilities formerly occupied by the airline. The lease is
with Goodyear Tire & Rubber Co. The lease is for a term of 2 years at an annual
rent of $36,000. See: Part II. Item 6. Exhibit No.10.17 - Goodyear Tire & Rubber
Company Lease
The Company entered into an agreement dated July 18, 2000 with
Reu-Dom Investments and Holdings, Inc. d/b/a World Class Beer Imports ("WCBI").
WCBI is in gthe business of exclusively importing, selling, marketing and
distributing imported beers and similar malt beverages. Under the agreement
Cuidao shall serve as the sole and exclusive sales and marketer of all brands
currently sold and any future products. The Company will operate under WCBI's
licenses and permits in the various jurisdictions in which WCBI is licensed. The
WCBI agreement is for a term of five (5) years and is automatically renewal for
successive three (3) years terms unless the parties have terminated their
arrangement. Under the agreement, Cuidao will pay the laid-in cost of such
inventory out of receipts from customers for inventory up to the value of
$119,000. All inventory over $119,000 will be paid for at the laid-in cost in
the Common Stock of the Company, the number of which shares shall be determined
by dividing the monthly cost of inventory sold by the average offer price of the
Company's shares during the month the product is sold. The shares will be issued
within seven (7) days of the close of the monthly books. The Company has agreed
to assume WCBI's lease for its premises in Oakland Park, Florida and to satisfy
any and all current existing accounts payable and other obligations of WCBI.
On July 19, 2000 the Company entered into a service agreement with
Reubin Share ("Share"), a principal of WCBI. Under this agreement will be
employed as the President of Cuidao's
<PAGE>
Beer Division. The term of the agreement is for five (5) years and is
automatically renewal for successive three (3) years terms unless the parties
have terminated their arrangement. As compensation, Share will receive a salary
of $40,000 per annum which may be increased by performance bonuses equal to 25%
of the base salary, in the event the Company achieves performance objectives. As
a sign-on bonus, the Company agreed to issue 25,000 shares of its restricted
Common Stock. The issuance of the securities was made pursuant to Regulation D,
Rule 506 of the Act.
In addition to the WCBI agreement and the Share service agreement,
the Company entered into termination option agreement dated July 19, 2000 which
provides that the other agreements are inter-dependent. This agreement allows
that if one agreement is terminated, then either party may elect to terminate
the other agreement.
Results of Operations for the Three Months Ending June 30, 2000 and 1999
During the three month period ending June 30, 2000 and 1999, the
Company had revenues of $54,485 and $31,564 respectively. This is an increase in
revenue of $22,921, or approximately 73%, compared to revenues during the
comparable period of 1999. The increased revenues resulted primarily from an
increase in sales, which are directly result of the Company's overall marketing
efforts.
The Company did not receive rent revenue during the three month
period ending June 30, 2000 from that portion of the Company's new facility
which was leased to an airline. The Company executed a new lease on this portion
of its facility with Goodyear Tire & Rubber, Co.. The lease terms begins July 1,
2000.
During the three month period ending June 30, 2000 and 1999, the
Company had General and Administrative operating expenses of $123,274 and
$66,987. This increase is primarily due to the Company's increased marketing
efforts and inventory storage and handling costs.
Management believes that continued implementation and expansion of
the Company's use of beer distributors and an increase in wine and liquor sales
by using a similar method will have a positive result on sales and revenues in
the future. Through its distributiion alliance with World Class Beer Imports,
the Company expects to maximize the rollout of its RED DRAGON beer products by
reaching more retail and specialty stores, without the need to increase the
Company's personel or payroll expenses. However, personel and payroll expenses
will be increased since the Company intends to hire an Asian brand
development/salesperson to work specifically with the on- premise accounts and
to assist out-of-state distributors on a part time basis.
With reference to the various alcoholic products marketed both on a
wholesale basis and as a distributor, profit percentages for various products
vary depending on which product is being marketed and depending on which venue
it is marketed through; i.e., whether to a wholesaler or marketed directly to
retailers by the Company acting in some instances as its own distributor.
Usually, beer products marketed to other distributors have approximately 25% to
30% profit, while wine and spirit products should have between 35% to 40%
profit. These gross profit margins represent an amount over and above the cost
of goods sold including all shipping, freight and duty (U.S. Custom charges).
When the Company acts as its own distributor, the gross margins are higher due
to the Company capturing the profit margins the distributor adds on to goods
which are sold to retailers, which is usually an additional
<PAGE>
25% to 30%. Thus on goods sold by the Company, acting as its own distributor it
is anticipated that it will achieve gross profit margins of approximately 45% to
55%.
Overhead and cost of operations, office, warehouse, marketing expense
and administrative staff, etc., is paid out of the revenues generated through
the traditional and/or non-traditional means described above. It is a primary
concern of the Company to keep all expenses to as much of a minimum as possible
without sacrificing the quality of marketing of any products or any areas which
need to be explored. This is why the Company has limited the amount of
administrative staff and why many duties which are normally delegated are being
performed by management. Essentially the philosophy of management is to be as
professional as possible in the marketing of products and establishment of
distributors and simultaneously to be frugal as possible with the limited funds
it has available.
Financial Condition
The Company's balance sheet for the period ended June 30, 2000,
reflects the acquisition of a new building. Management concluded that in both
short and long term, it was more financially prudent to own its own facility
than to pay a rent which was higher than the resulting mortgage.
The Company has executed a loan agreement with Infinity Financial
Group, Inc. which it believes will provide it with the necessary initial working
capital required to effectively execute its business plan. The Company believes
that by expanding its product distribution and thereby increasing sales revenues
it will internally generate sufficient working capital to enable management to
continue its goal to increase the number of distribution channels for its
products. It is the Company's belief that once it is able to expand its product
line and distribution channels it will be able to rely on its own internally
generated cash flow to support its operations.
Forward-looking Statements
This Quarterly Report on Form 10-QSB contains statements relating to
future results, which are forward-looking statements as that term is defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements which are
other than statements of historical assumptions or facts. Specifically, this
report contains forward- looking statements regarding anticipated future sales
and revenues and the methods and strategies of increasing those sales and
revenues. Actual results may differ materially from those anticipated as a
result of certain risks and uncertainties, including but not limited to,
management's ability to implement its marketing strategy, the availability of
capital through sale of additional common stock or other means, including the
availability of products for sale through credit insurance and distribution
alliances, changes in general economic conditions, foreign exchange rate
fluctuations, competitive product and pricing pressures, the impact of tax
increases with respect to alcoholic beverage products, regulatory developments,
as well as other risk and uncertainties detailed from time to time in the
Company's Securities and Exchange Commission filings. The Company's
expectations, beliefs and projections are expressed in good faith and are
believed by the Company to have a reasonable basis, including without
limitation, data contained in the Company's records and other available data
from third parties, but there can be no assurance that management's
expectations, beliefs or projections will result, or be achieved, or be
accomplished.
Part II.
<PAGE>
Item 1. Legal Proceedings
The Company has filed a financial lawsuit against Investors
Conceptual Services Incorporated. This action is for non-payment by Investors
Conceptual Services Incorporated, of funds owed to the Company. The amount of
this debt was specified within an agreement between Company and Investors
Conceptual Services Incorporated.
As of December 31, 1999, the Company had a disputed bill relating to
printing charges with Bowne of Los Angeles. As of the date of this filing the
Company is in the process of attempting to reach an equitable settlement with
reference to this disputed amount. Bowne secured a judgment against the Company.
The Company has filed an appeal with the appropriate Court in California.
As of June 30, 2000, the Company was in default under the terms of
its Second Mortgage Promissory Note which by its terms had brought current the
Company's First Mortgage Promissory Note. In addition, the monthly payments for
February though June of 2000 are in arrears. A lease with a national credit
tenant for fifty percent of the Company's building for occupancy commencing July
1, 2000 has been signed. The Lessee, The Goodyear Tire & Rubber Company, will be
paying a monthly rent of $2,500. It is the Company's goal to refinance its
Second Mortgage Promissory Note to reduce the overall debt of the Company by
paying down the amount being financed and also secure said loan at a more
competitive interest rate. In the event that refinancing is not immediately
accomplished, bridge financing has been arranged to bring payments current.
On July 12, 2000, a summary judgement was entered by Broward Circuit
Court in favor on the Second Mortgage holders in the amount of $172,756.93. Sale
of the property was scheduled for August, 2000. The Company has arranged for the
property to be bought on its behalf by a current shareholder. This arrangement
will bring the Company current in its obligations on the Second Mortgage
Promissory Note. The terms of repayment by the Company to this shareholder for
bringing its Second Mortgage Obligation current have not been finalized. No
assurance can be given that this buy-out will be completed in a timely fashion
or that the terms will be favorable to the Company.
Item. 2. Changes in Securities and Use of Proceeds
On April 11, 2000 the Company approved an Employee/Consultant Stock
Compensation Plan for 1,000,000 shares of Common Stock. The plan was registered
with the Securities and Exchange Commission on Form S-8. The purpose of the plan
is to provide the Company with a method to compensate consultants and certain
employees for bona fide services. Awards under this plan are under the sole
discretion of the Company's Board of Directors. The grant of an award under the
plan does not confer the consultant or employee with any rights for continued
engagement by the Company
On July 18, 2000, the Company entered into an agreement with WCBI
under which inventory in excess of $119,000 is to be paid in the form of shares
of the Company's Common Stock, the number of which shall be determined by
dividing the cost of the inventory sold in a month by the average offer price
for the month in which said sales were made. No shares have been earned or
issued under this formula to date. When such shares are issued, the Company will
rely upon Regulation D, Rule 506.
<PAGE>
On July 19, 2000, the Company entered into a service agreement with
Mr. Share. Under this agreement, the Company granted Mr. Share 25,000 shares of
its restricted Common Stock as a sign- on bonus. Such issuance is being made in
reliance on Regulation D, Rule 506.
During the quarter the Company entered into the Loan Agreement with
IFG. As of the date of this report, the Company has received instalments totally
$134,245.39 under the terms of the agreement. The Company has executed six (6)
promissory notes and issued warrants to purchase 36,413 shares. Thus far,
271,722 shares have been placed in escrow with IFG against the conversion of all
of the notes, with interest for the term and exercise of all of the warrants.
These shares were issued in reliance on Regulation D, Rule 506. The Company is
preparing a registration statement on Form SB-2 for filing covering 3,322,667
shares of its Common Stock which will cover all notes if issued plus interest at
the rate of 8% per annum for two(2) years at a fixed conversion price of $0.75
per share and 500,000 warrants exercisable at $1.50.
Item 3. Defaults upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are
incorporated herein by reference, as follows:
<TABLE>
<S> <C>
Exhibit No. Description
---------- -----------------------------------------------
3.0 Amended and Restated Articles of Incorporation of Cuidao Holding Corp.(1)
3.1 Bylaws of Cuidao Holding Corp.(1)
4.0 Specimen Stock Certificate(1)
10.0 Cuidao Holding Corp. 1999 Equity Incentive Plan(1)
10.1 Cuidao Holding Corp. 1997 Directors' Stock Option Plan(1)
10.2 Import and Distribution Agreement by and between Cuidao Holding Corp. and the People's
Republic of China, Tsingtao Brewery No. 3 Co., Ltd.(1)
10.3 Import and Distribution Agreement by and between Cuidao Holding Corp. and Cave
duVignoble Gursonnais(1)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
10.4 Import and Distribution Agreement by and between Cuidao Holding Corp. and Les Chais du
Prevot(1)
10.5 Import and Distribution Agreement by and between Cuidao Holding Corp. and Vignerons De
Buzet(1)
10.6 Import and Distribution Agreement by and between Cuidao Holding Corp. and Godet
Freres(1)
10.7 Form of Lock-Up Agreement by and between Cuidao Holding Corp., West America
Securities Corp. and certain shareholders of Cuidao Holding Corp.(1)
10.8 Form of Promotional Share Lock-In Agreement by and between Cuidao Holding Corp. and
certain shareholders of Cuidao Holding Corp.(1)
10.9 Promissory Note and Mortgage and Security Agreement dated January 22, 1999 by and
between Cuidao Holding Corp. and Em-Star Mortgage Co.(2)
10.10 Promissory Note dated January 22, 1999 by and between Cuidao Holding Corp. and
Sebastiano Salemi and Nunzia Salemi, as husband and wife.(2)
10.12 Assignment of Lease Agreement dated January 22, 1999 by and between
Sebastiano Salemi and Nunzia Salemi, as husband and wife, and Cuidao
Holding Corp.(2)
10.13* Loan Agreement dated April 5, 2000 including the Promissory Note, Security Agreement,
Registration Rights Agreement and Escrow Agreement
10.14* Exclusive Sales and Marketing Agreement dated July 18, 2000 with WCBI
10.15* Service Agreement with Ruebin Share dated July 19, 2000
10.16* Termination Option Agreement dated July 19, 2000
10.17* Goodyear Tire & Rubber Company Lease
10.35 Cuidao Holding Corp. 2000 Employee/Consultant Stock Compensation Plan(3)
21.0 Subsidiaries of Cuidao Holding Corp.(2)
27.0 * Financial Data Schedule
</TABLE>
---------------------------------------------
(1) Incorporated herein by reference to the Company's Registration Statement on
Form SB-2 filed on December 30, 1997.
(2) Incorporated herein by reference to the Company's 10 QSB for the Quarter
ended March 31, 2000.
<PAGE>
(3) Incorporated herein by reference to the Company's Form S-8 filed on May 22,
2000.
* Filed herewith
(b) No Reports on Form 8-K were filed during the quarter ended June 30,
2000.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CUIDAO HOLDING CORP.
(registrant)
Dated: August 20, 2000 By: /s/ C. Michael Fisher
---------------------------
C. Michael Fisher
President & Chief Financial Officer
